Mdr charge

[Manmeet S]

I am merchant and want to facilitate my customer to pay with any payment method like credit card,upi, debit card,net banking and pay later
Is there any trick to escape from MDR charges or payment gateways charges

 

[_rohitsoni]

You can allow payment via Rupay CC on UPI and ask customer to pay in 2000rs chunks, as any amount above that will attract MDR. All other methods like CC, DC, NB, PL incl. Rupay CC in UPI for payments above 2000 will attract some MDR irrespective of the platform (they are providing you service, so they're bound to charge for it).

 

[TaxWiser]

I am merchant and want to facilitate my customer to pay with any payment method like credit card,upi, debit card,net banking and pay later
Is there any trick to escape from MDR charges or payment gateways charges

If your average profit margin is above 12%, it’s advisable to absorb MDR charges as a long-term investment in your business. These charges are unlikely to significantly impact your profitability, and offering modern payment options can enhance customer experience—especially for Gen Z and finance or tech-savvy individuals. This approach positions your business as innovative and convenient, fostering customer loyalty and attracting a wider audience over time.

However, if your average profit margin falls below 12%, prioritize optimizing your profitability before incurring MDR charges. Consider temporarily limiting payment methods that generate these fees and focus on strategies to expand your business and improve your overall revenue and profits. In the short term, revenue growth and profit maximization should take precedence over accommodating payment methods. Once your business achieves a stable financial foundation, you can revisit offering diverse payment options to boost customer convenience.

To cut the Long Story short, MDR charges can be a worthwhile investment for businesses with solid profit margins, especially considering the benefits of attracting tech-savvy customers who prefer cashless payment options. Conversely, businesses with tighter margins should first stabilize and grow profitability before absorbing additional costs.

 

[Personal Finance by Nish…]

Hope this will be useful for you.

You can optimise your MDR Charges by
Negotiating with Your Bank: If you have a high transaction volume, negotiate with your bank to get a better MDR rate.
Choose the Right Payment Gateway: Select a payment gateway that offers competitive MDR rates and fees. Some popular options include: Razorpay, PayU, CCAvenue, PayPal.
Opt for a Zero-MDR Payment Gateway: Some payment gateways, like Razorpay, offer zero-MDR plans for certain types of businesses or transaction volumes.
Use UPI Payments: UPI transactions typically have lower MDR charges (0-0.65%) compared to card transactions.

Thanks