Indian digital financial services platform Paytm today announced waiver of all charges on merchant transactions. It will enable the merchant partners to accept payments from Paytm wallet, UPI apps and RuPay cards at zero charges.
Paytm said that it will absorb Rs 600 crore in MDR (Merchant Discount Rate) charged annually by banks and other charges to support MSMEs (Micro, Small and Medium-sized Enterprises) during the ongoing pandemic. This move is aimed at ensuring that these merchants have adequate liquidity to expand their businesses.
Paytm also said merchants will also have the power to choose whether they want to receive payments directly into their bank accounts or into their Paytm wallet.
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But what is MDR?
MDR is charged on payments made to merchants through BHIM UPI platform and AePS (Aadhaar enabled Payment System). When payment is made at a merchant point of sale, MDR is payable by the trader to the bank.
Kumar Aditya, Senior Vice President, Paytm said, “We are absorbing MDR to extend support to our merchant partners to increase their overall liquidity to expand their businesses. This move would also encourage merchants to embrace digital payments which would further strengthen the Digital India mission."
In a press statement, Paytm further said "This initiative will benefit more than 17 million merchants on Paytm ecosystem who use Paytm All-in-One QR, Paytm Soundbox and Paytm All-in-One Android POS to accept payments from their customers."
Paytm to the aid of MSMEs
Paytm said it has been promoting acceptance of payments through all methods, including Paytm Wallet, UPI, RuPay, NEFT and RTGS, and empowers merchants to accept unlimited payments Paytm All-in-One QR at zero charges, it added.
Paytm is also extending financial support to MSMEs and aiming to disburse Rs 1,000 crore in loans by March 2021. The company continues to offer collateral-free loans under the ‘Merchant Lending Program’ in Paytm for Business app.
Its algorithm determines the credit-worthiness of the merchant based on daily transactions and arrives at a pre-qualified loan offering. It has digitised the entire process starting from the loan application, approval to disbursal with no additional documents required in partnership with NBFCs and banks.
Paytm had yesterday announced that its wholly-owned subsidiary Paytm Money will facilitate investments in Initial Public Offers (IPOs) in India.