There would be a sharp increase in acceptance of debit cards if RBI permits banks to subtract fees for payments made by using debit cards just like it is done when clients withdraw money from 3rd party ATMs.
Few bankers and retailers stoutly defend this step as they believe it would increase the use of debit cards.
Retailers say that if this move is made, it will introduce a sea change in the payment system in India.
The Retail Association of India claimed, “When customers pay through debit cards, thereby paying through their bank accounts in what could be the cheapest modes of money transfer, there still exists a high cost factor, thanks to the existing high MDR on debit cards that fails to be justifiable”.
Bank of Baroda said that while no distinction is made between debit and credit card payments at the time of swiping, a distinction can still be made by lowering the charges when debit cards are swiped.