After the Omicron wave subsided in the country, the economy has boomed. Merchants and small to medium business owners are clearly seeing an increase in online sales as delivery restrictions are eased and complementary items are being bought by customers. Usually, more sales lead to more revenue. Thus, the business owner gets more profit. However, there is one thing in this that always bothers the business owners on every transaction.
Yes, we are talking about MDR, or Merchant Discount Rate. This is the fee charged by gateway companies to process transactions between the user and the business owner. Based on traditional estimates, business owners spend around Rs 1 lakh per month on MDR. Now by switching the transaction to such a new and modern gateway, the charges on MDR can be saved. This lets you, as a business owner, get the full cost of your inventory with a savings of INR 97,700 per month! Let’s learn how
Information about MDR
As we have already mentioned, MDR refers to the fee that a business pays while accepting digital payments from its customers. Therefore, if you are selling an item that costs INR 1,000 and the payment gateway charges a 1.8% fee (standard fee for using a credit card, debit card and wallet), you as the business owner Only INR 982 is available, the remaining INR 18 is deducted by the payment gateway.
Till now, payment of MDR fee was considered an essential part of online sales, as there was no other option. However, now UPI can be used to reduce this fee. To eliminate MDR charges completely, you need to use payment gateway of Paytm. This gateway credits your entire amount to your account at no charge.
Let us understand it with the help of an example
Comparison between different payment gateways –
The most popular payment gateways include payment methods such as credit cards, debit cards, netbanking, UPI and online wallets. Here’s how different payment gateways charge fees for payment from different sources.
Payment Source | Paytm | Razorpay | PayU |
UPI | 0% | 2% | 2% |
Credit Card | 1.99% | 2% | 2% |
Debit Card (Rupay) | 0% | 2% | 2% |
Debit Card (Other) | 0.4%-0.9% | 2% | 2% |
net banking | 1.99% | 2% | 2% |
Paytm Wallet | 1.99% | not available | not available |
As you can see, the average rate of MDR is around 2% of the total sales amount. This means that if your customers exercise the above options, you will only get 98% of the total sale price in your account.
However, if you look closely, you will find that Paytm Payment Gateway is the only payment gateway in India that allows you to accept UPI payments at zero charges, as it has 0% MDR on UPI.
This means that if you use the Paytm Payment Gateway to accept digital payments and a customer makes a purchase of INR 1,000 via UPI, your business receives the full amount (₹1000).
You can save INR 97,700 every month
While 0% MDR brings you comfort, there is one thing that makes it even better. That is Paytm Payment Gateway. Customers use this gateway more and more for transactions, so you save around 2% on MDR charges per transaction.
Let us understand how this will help you save INR 97,700 every month. Let’s say your business has a total monthly sales volume of INR 1 Crore. All this volume comes through online payments through credit cards, debit cards, netbanking, UPI, and wallets.
Currently, there is a huge market trend in India and the use of UPI as the preferred payment mode is increasing and 40% of the transactions are done through UPI.
Both the tables below show how much a business will pay as payment gateway charges to Paytm Payment Gateway and other payment gateways. Here this thing can be properly understood.
Paytm Payment Gateway From Payment to do Feather to take the ones fee | ||||
Payment Of Way | transaction Of division ,Percent In, | business To meet Wally Amount ,Ten million In, | Paytm MDR | fee (INR In, |
credit card | 10% | 0.10 | 1.99% | 19,900 |
debit card | 15% | 0.15 | 0.85% | 12,750 |
met banking | 10% | 0.10 | 1.99% | 19,900 |
UPI | 40% | 0.40 | 0% | 0 |
Wallet | 25% | 0.25 | 1.99% | 49,750 |
Total | 1,02,300 |
Now let’s look at the charges for making payments through payment gateways other than Paytm Payment Gateway.
Other payment Gateway From Payment to do Feather to take the ones fee | ||||
Payment Of Way | transaction Of division ,Percent In, | business To meet Wally Amount ,Ten million In, | MDR | fee (INR In, |
credit card | 10% | 0.10 | 2.00% | 20,000 |
debit card | 15% | 0.15 | 2.00% | 30,000 |
met banking | 10% | 0.10 | 2.00% | 20,000 |
UPI | 40% | 0.40 | 2.00% | 80,000 |
Wallet | 25% | 0.25 | 2.00% | 50,000 |
Total | 2,00,000 |
You can see, if 40% of your customers use UPI and you pay 2% MDR for every transaction, then you will have to pay a lot more than if you use Paytm Payment Gateway at 0% MDR.
Any savvy trader looking at these two charts will know immediately what to do. In fact, at a time when it is important to spend money wisely in every aspect of the business, the option of saving INR 97,700 cannot be easily overlooked. Actually, Paytm Payment Gateway offers 0% MDR not only on UPI but also on RuPay Debit Card.
Apart from this, customers also get other benefits such as smooth payment experience, highest encryption grade security to prevent fraudulent transactions, T+1 settlement unaffected by bank holidays and weekends, 3000 transactions per second and industry-level success rate.
Consider adopting Paytm Payment Gateway as a complete package. It manages your transactions without charging you MDR charges when your customers pay with UPI or Rupay debit cards. Do you understand how this is a win-win deal for everyone?
For more information about Paytm PG, click here
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