Guidelines from the Reserve Bank of India will be positive for the company, said Rishi Gupta, MD & CEO, Fino Payments Bank on CNBC-TV18, a day after the Reserve Bank of India (RBI) decided to review the charges levied on customers across various digital payments modes.

“We will not be adversely impacted by RBI’s plan of reducing the merchant discount rate charges,” said Gupta.

An MDR or Merchant Discount Rate refers to the rate at which the merchants are charged for accepting payments made via credit cards, debit cards, net banking, and digital wallets.

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The MDR levied on debit cards, except for Rupay cards, is capped at 0.90 percent. For Rupay debit cards, the MDR is zero. However, there is no such cap on wallet transactions or credit cards. MDR charges on credit cards could range from 1.5 -3.5 percent in some cases, whereas MDR charges on wallet transactions could be upwards of 2-2.5 percent. A cap on these charges could hurt the revenues of the players involved.

Gupta further said that Debit Card and prepaid payment instruments (PPI) are free now but will see some charges over there.

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He added that in the last two years, the growth of UPI platforms in rural has increased.

"The growth of UPI platform in rural is increasing, at about 2 percent of our volume used to come from UPI, now about 10 percent of our value actually comes from UPI platform. Recently, RBI is also talked about UPI on feature phones which will also be beneficial for the rural market. We are already moving in a digital way and in a digital business. So both the conversations on UPI as well as on UPI on feature phone will be beneficial to Fino as we grow our businesses in rural India," said Gupta.

There is zero MDR charge on UPI transactions currently, which means players can’t charge commissions and don't make any money on UPI-based transactions. Industry players have been asking for this zero-MDR rule to be done away with for a while, and this may also be examined by RBI via the proposed discussion paper.

For the full interview, watch the accompanying video.

First Published:Dec 9, 2021 3:25 PM IST