The RBI's over-arching vision for payment systems in recent years has been the encouragement of electronic payments and migration to a 'less-cash' society.

Cash continues to be the predominant mode of payment as it appears to be 'costless' in comparison to the visible costs associated with card/electronic payments.

Among other things the paper proposes promote setting up of Acceptance Development Fund (AFD), which are market-driven initiatives where different stakeholders in the card payment value chain come together to set up a program to encourage wider deployment of card acceptance infrastructure.

Typically, these ADFs are generally funded by card issuers to build a corpus by diverting a percentage of their transaction revenue into the fund which is then invested to expand acceptance infrastructure in the country.

The paper further talks about rationalisation of Merchant Discount Rate (MDR), which is major source of revenue in the card business. It has suggested multiple options for rationalisation of MDR for debit card transactions.

These include, uniform ad-valorem MDR across all merchant categories and locations;  differentiated MDR at select merchant categories at all locations and  setting MDR for debit cards as a fixed/flat fee for transactions beyond a certain value.

The policy focus of the RBI has been to facilitate the growth in electronic payment services and also ensuring safety and security of such transactions.

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