Nice and interesting read! Which are these other companies that can also develop SWITCH and which are not the acquiring bank? What are they called, how does it work and do they need to have some acquiring bank at the backend to complete this transaction flow?
This was interesting article, I learnt new thing today. I was just under impression that issuing banks only earn by our late fees and interest but there is another huge source of income which is MDR! Please continue to bring such useful articles @Ankur. Also the style you write the article is nice so that reader sticks to it and read it till end. Thanks a lot
Do you think the MDR eventually gets passed on to the customers as increase in cost of the products. I bet the sellers/merchants do not want to compromise on the profit percentage? Or is the convenience of using credit cards making the customers buy more than what they need, does the compensation for that?
That depends Nishit. For example, for MRP products, there's nothing the merchant can do. I've seen certain merchants charge more if you swipe your card, but that's not very widespread. Most merchants happily accept cards without overcharging.
Nice and interesting read! Which are these other companies that can also develop SWITCH and which are not the acquiring bank? What are they called, how does it work and do they need to have some acquiring bank at the backend to complete this transaction flow?
took me 6 min
This was interesting article, I learnt new thing today. I was just under impression that issuing banks only earn by our late fees and interest but there is another huge source of income which is MDR! Please continue to bring such useful articles @Ankur. Also the style you write the article is nice so that reader sticks to it and read it till end. Thanks a lot
Thank you so much Swanand. Glad you find it interesting..It means a lot! 🙂
Do you think the MDR eventually gets passed on to the customers as increase in cost of the products. I bet the sellers/merchants do not want to compromise on the profit percentage? Or is the convenience of using credit cards making the customers buy more than what they need, does the compensation for that?
That depends Nishit. For example, for MRP products, there's nothing the merchant can do. I've seen certain merchants charge more if you swipe your card, but that's not very widespread. Most merchants happily accept cards without overcharging.