No charges on debit card transactions up to Rs 2,000: FinMin

New Delhi: Customers will no more have to pay any transaction charges for payments through debit card, BHIM app and other payment made for up to Rs 2,000.

Last month, the Union Cabinet had approved a proposal that government will bear the merchant discount rate (MDR) charges on transactions up to Rs 2,000 made through debit cards, BHIM UPI or Aadhaar-enabled payment systems with effective from January 1, 2018 to promote digital transactions .

In a tweet, Financial Services Secretary Rajiv Kumar said, "Happy Digital 2018. December Quarter BHIM transaction rises 86 per cent to 145.6 million with value of Rs 13,174 crore."

"Further impetus to digital payments, government to reimburse charges for transaction up to Rs 2,000 on debit cards/BHIM. Zero charges on merchants. Go Digital, embrace transparency," he said.

The merchant discount rate (MDR) will be borne by the government for two years with effect from January 1, 2018 by reimbursing the same to banks.

The move will have an impact of Rs 2,512 crore on the exchequer.The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi.