June 14: Leading payment network company Visa has slashed rates on debit card transactions in India to lure customers and small merchants into the network. A report said that, in a note that was circulated among member banks, Visa had cut the rates on domestic transactions by up to 95%.
The new rates, which will be effective from July 1, take down the data processing fee to as low as 15 paise for transaction up to Rs 2000 for card issuing banks, while those above Rs 2000 will be bearing a charge of Rs 1.5 per transaction. Previously, Visa had been levying a constant charge of Rs 2.99 for all transactions regardless of the size of the transaction carried out through debit cards.
Visa has also taken down the charges for merchant acquiring banks, with the transaction cost being reduced to 15 paise per transaction of up to Rs 2000 from 45 paise. However, the service fee has now been raised to 0.055% of the transaction amount from the previous 0.035%.
Visa has enforced the rate cut to encourage everyday digital payment usage across consumer and merchant categories. Visa said that the move will also help client initiatives towards expanding digital payment infrastructure in support of the Digital India program in addition to driving the adoption of debit card payments among customers.
Despite credit card transaction accounting to over 50% of the card payments in the country in terms of value, debit card surge in terms of volumes. At present, around 96% of the cards being used in the country are debit cards, representing a mounting overall figure of 867 million debit cards.