Mswipe founder Manish Patel
Mswipe founder Manish Patel

Point-of-sale terminal solutions provider Mswipe is offering an acceptance solution that waives off Merchant Discount Rates for small businesses, as adoption of digital payment modes has gathered pace due to the Covid-19 pandemic.

The startup’s Bank Box product will allow merchants to process all debit and credit card transactions, including those issued by Visa and Mastercard, without incurring any rental or MDR.

The “industry-first” acceptance solution comes at a time when merchants across the country are looking at the cheapest ones to make digital payment services available at their stores, Manish Patel, CEO of Mswipe, told ET in an exclusive interview.

MDR is a fee accrued by banks, and generally levied from merchants processing the transactions.

Last year, the government waived off the fee on transactions through the National Payments Corporation of India’s popular Unified Payments Interface (UPI) and RuPay debit card modes.

However, these charges still apply on transactions made through Mastercard and Visa cards.

Mswipe’s move aligns with several other payment industry participants such as BharatPe and Paytm, who have waived off or subsidised MDR to lure more merchants to accept payments on their channels in recent months.

Bank Box comes with a QR sticker, a contactless POS and a prepaid card. It is a “bundling” of acceptance and issuance of low-ticket payments onto a single prepaid account, allowing Mswipe to process these transactions without charging MDR.

“Two of the biggest friction points in accepting digital payments was MDR and rentals that the small business had to pay,” said Patel. “With this solution, we are getting into the business of both issuance and acquiring.”

Mswipe is targeting merchants with an average daily digital collection of Rs 2,000 – Rs 2,500 in tier 3-4 markets and Rs 8,000 – Rs 10,000 in metro and semi-urban areas, said Patel.

The nine-year-old startup is one of the leading merchant acquirers in the country with over a million merchants using its services.

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