Did you know that you can file a complaint with the RBI if a merchant charges you MDR fees for using a credit card?

[TechnoFinoTechnoFino is verified member.]

Did you know that if a merchant charges you MDR fees for using a credit card, which is supposed to be paid by the merchant, you can file a complaint with the RBI banking ombudsman?
This is in line with the RBI and bank policy that requires merchants to pay MDR fees for accepting credit card payments and prohibits them from passing these fees onto customers. If a merchant does pass on MDR fees to you, then you can first approach the POS terminal issuing bank for assistance. If the bank is unable to help, you can then file a complaint with the RBI banking ombudsman.




Here's a real-life example of this issue.
A few months ago, I went to a local pharmacy and requested to pay with my credit card. However, the store manager informed me that if I wanted to use my credit card, I would have to pay an extra 2% fee. Have you ever wondered why merchants ask for these additional fees for credit card payments? This is because banks charge merchants a fee of 1% to 4% (depending on the business category) for accepting credit cards, which is known as the Merchant Discount Rate (MDR). However, according to the RBI and the POS machine issuing bank, this fee should be absorbed by the merchant and not passed on to customers.

How to file a complaint with the RBI banking ombudsman [full guide] - https://www.technofino.in/community...ank-on-the-rbi-banking-ombudsman-portal.3130/

Jaankar Baniye, Bank Se Satark Rahiye...

 

[sabbysingh28]

Mtlb kuch samaj nhi aya ?

 

[ins]

Mtlb kuch samaj nhi aya ?

If I understand correctly, sometimes some shops do not accept credit cards easily and even if they do, they'll sometimes ask you to pay 1% or 1.5% extra if you wish to make the payment via credit card. Now, this is where the above-mentioned form comes into play. Considering this is illegal, you can make a formal complaint that the merchant made you pay the extra amount which they were supposed to pay from their end.
(please correct me if I am wrong)

 

[TechnoFinoTechnoFino is verified member.]

Mtlb kuch samaj nhi aya ?

added an example for clarity.

 

[787]

What about credit card payment on income tax website!?

They charge us an additional fee, you may call it MDR or gateway fee, but essentially that’s being passed on to us.

Even while paying property tax on municipal corporation websites.

 

[Dr-green69]

Did you know that if a merchant charges you MDR fees for using a credit card, which is supposed to be paid by the merchant, you can file a complaint with the RBI banking ombudsman?
This is in line with the RBI and bank policy that requires merchants to pay MDR fees for accepting credit card payments and prohibits them from passing these fees onto customers. If a merchant does pass on MDR fees to you, then you can first approach the POS terminal issuing bank for assistance. If the bank is unable to help, you can then file a complaint with the RBI banking ombudsman.

View attachment 12884


Here's a real-life example of this issue.
A few months ago, I went to a local pharmacy and requested to pay with my credit card. However, the store manager informed me that if I wanted to use my credit card, I would have to pay an extra 2% fee. Have you ever wondered why merchants ask for these additional fees for credit card payments? This is because banks charge merchants a fee of 1% to 4% (depending on the business category) for accepting credit cards, which is known as the Merchant Discount Rate (MDR). However, according to the RBI and the POS machine issuing bank, this fee should be absorbed by the merchant and not passed on to customers.

How to file a complaint with the RBI banking ombudsman [full guide] - https://www.technofino.in/community...ank-on-the-rbi-banking-ombudsman-portal.3130/

Jaankar Baniye, Bank Se Satark Rahiye...

Let me tell u a story. In june 2022 i went to buy a gold ring for my wife n at checkout i told them ill pay by credit card so store owner came to me and said if u want to pay by cc then u have to pay 2.5% extra so i asked him why do i have to pay extra and he told me this is bank charge and i have to pay that so i agreed and paid the amount. Now next day i called icici and told cc support that that merchant charged me 2.5% extra and he replied sir thats totally legal and merchant can do that and we cant do anything.

 

[Dr-green69]

What about credit card payment on income tax website!?

They charge us an additional fee, you may call it MDR or gateway fee, but essentially that’s being passed on to us.

Even while paying property tax on municipal corporation websites.

Bro on 10th march i paid for passport fee and they charged me 25rs extra for using cc

 

[panchabhut]

Has anyone EVER got the excess charge back by complaining to RBI/ombudsman
Even IRCTC charges MDR extra for booking via credit card. IF its illegal, can IRCTC be taken to the court?

 

[TechnoFinoTechnoFino is verified member.]

What about credit card payment on income tax website!?

They charge us an additional fee, you may call it MDR or gateway fee, but essentially that’s being passed on to us.

Even while paying property tax on municipal corporation websites.

merchants accepting online payments are allowed to add convenience fees.

 

[TechnoFinoTechnoFino is verified member.]

Let me tell u a story. In june 2022 i went to buy a gold ring for my wife n at checkout i told them ill pay by credit card so store owner came to me and said if u want to pay by cc then u have to pay 2.5% extra so i asked him why do i have to pay extra and he told me this is bank charge and i have to pay that so i agreed and paid the amount. Now next day i called icici and told cc support that that merchant charged me 2.5% extra and he replied sir thats totally legal and merchant can do that and we cant do anything.

in that case you should print and email to ICICI first, wait for their response, and if they don't help, RBI ombudsman option is open for you. and for accepting offline POS payment, merchants an not charge extra to their customers (except fuel station).

 

[anilkrsh]

But are there any other exceptions? I wanted to pay booking amount of my car through card and the dealer asked extra 2pc for credit card payment!! They said for larger amount, they are allowed to pass mdr to customers. Is this true?

 

[kochiro]

Even gov own portal like sbi collect and other educational fees gateway charges extra for cc so why is it not fair for merchant to do it ?

 

[panchabhut]

When was this regulation regarding restriction on merchants on passing off of MDR of Credit Card of RBI notified? As per this consultation paper of 17 August 2022 (para 9.3.2) "RBI has not issued any regulatory mandate or intervened on MDR for credit card transaction"

https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=21082

Para 9.3.3 (i) also notes "....It is also true that some merchants recover the cost of a credit card transaction from customers by levying surcharge for credit card usage or by giving more discount on cash payments as compared to credit card payments, thereby leading the customers to opt for cash payments or end up passing onto them the cost of accepting the transaction......"

 

[bugmenot]

If a merchant does pass on MDR fees to you, then you can first approach the POS terminal issuing bank for assistance. If the bank is unable to help, you can then file a complaint with the RBI banking ombudsman.

Will it require an invoice mentioned with that extra charge taken for swiping credit card? If yes, then I believe no merchant will be ready to give such invoice unless one is able to convince him/her.

 

[kochiro]

Will it require an invoice mentioned with that extra charge taken for swiping credit card? If yes, then I believe no merchant will be ready to give such invoice unless one is able to convince him/her.

Well you are paying entirely by card including 2% extra saying I don't have cash at all so of course it will show up in card, you will have invoice of less than the amount deducted from the card.

 

[TechnoFinoTechnoFino is verified member.]

When was this regulation regarding restriction on merchants on passing off of MDR of Credit Card of RBI notified? As per this consultation paper of 17 August 2022 (para 9.3.2) "RBI has not issued any regulatory mandate or intervened on MDR for credit card transaction"

https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=21082

Para 9.3.3 (i) also notes "....It is also true that some merchants recover the cost of a credit card transaction from customers by levying surcharge for credit card usage or by giving more discount on cash payments as compared to credit card payments, thereby leading the customers to opt for cash payments or end up passing onto them the cost of accepting the transaction......"

please read the whole para 9.3.

RBI has not issued any regulatory mandate or intervened on MDR for credit card transaction

that means rbi is not managing min and maximum MDR just like they do in the case of debit card.

 

[Consultant]

The dealer asked me to pay 1.5% extra while purchasing a scooty on my Cc. The 1.5%, I had to pay via google pay. Is that legal?
Also, I would be purchasing a bike for a friend ~3.5 lacs. Now, 1.5% here would be a bomb, if the dealer asks for it.

Is it allowed?

 

[Wealth is my birth right!]

The dealer asked me to pay 1.5% extra while purchasing a scooty on my Cc. The 1.5%, I had to pay via google pay. Is that legal?
Also, I would be purchasing a bike for a friend ~3.5 lacs. Now, 1.5% here would be a bomb, if the dealer asks for it.

Is it allowed?

Yes automobile showrooms still live 10yrs back they r asking 2% for a car down payment

 

[kochiro]

The dealer asked me to pay 1.5% extra while purchasing a scooty on my Cc. The 1.5%, I had to pay via google pay. Is that legal?
Also, I would be purchasing a bike for a friend ~3.5 lacs. Now, 1.5% here would be a bomb, if the dealer asks for it.

Is it allowed?

What you mean Google pay ? Upi is free and if it's cc means tap to pay you can't use it for that huge transaction.

 

[Consultant]

What you mean Google pay ? Upi is free and if it's cc means tap to pay you can't use it for that huge transaction.

Dude. While I paid 1 lac on my card for the bike, the 1500 extra charge I had to send it via GPay. Dealers charge 1.5% extra if we pay via Cc & they do not give a bill for it.
No matter how much you ask them for it. Not sure if that's allowed tbh. Any idea?