OMCs may save ₹500 crore a year on withdrawal of merchant discount rate

Oil marketing companies will save ₹400-500 crore annually every year with the proposed removal of merchant discount rate (MDR), two company executives said.

MDR is a card transaction fee paid by the merchant—in this case, the fuel company—and shared by banks which put up the swipe machine and issue the card, and payment networks like Visa and Mastercard.

MDR is not passed on to customers.

In her maiden budget speech, finance minister Nirmala Sitharaman said that no MDR shall be imposed on merchants who allow their customers to make payments through low-cost digital payment modes.