Zero MDR mandate adversely affecting fintech ecosystem: IAMAI

The stipulations made under Budget 2019 mandating zero merchant discount rates (MDR) is ''adversely affecting'' the financial technology (fintech) ecosystem, industry body Internet and Mobile Association of India (IAMAI) said on Wednesday.

The association, in a statement, said the Indian fintech start-ups in the sector of digital payments have been ''adversely affected with the zero MDR mandate by the government''.

''The association has been vocal about the industry concerns and has shared these asks with the relevant authority as part of its pre-Budget submission recently,'' IAMAI added.

In addition to the pre-Budget submissions on the issue, the industry body has also reached out to the Ministry of Finance, Niti Aayog, the Ministry of Electronics and Information Technology and the RBI with its proposal.

''Zero MDR on RuPay debit cards and UPI is restricting digitising the MSMEs (micro, small and medium enterprises) as MDR is the primary source of revenue for the participants in the payment ecosystem,'' it said.

The industry association emphasised that zero MDR restricts the capabilities of Indian fintech and payments ecosystem to reach global levels.

Simply put, MDR is the rate charged to a merchant by a bank for providing debit and credit card services.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)