RBI Guidelines For MDR Charges | Can shopkeeper charge you extra for using credit cards?

[SaiyamK]

No through GPAY we have MDR charges

 

[Abhishek012]

Rupay already has 0 MDR charges, which is the main problem that it's acceptance by Shopkeepers/Banks is low compared to Visa/MC

RuPay Credit card also charge MDR fees 2% to 3%, depend on card variant.

Only RuPay debit card have Zero MDR fees. Max free upto 2k transactions. Transactions above 2K, MDR fees applied.

 

[thanix]

No through GPAY we have MDR charges

This is news to me. UPI doesn't have MDR as far as I know as mandated by RBI. What Gpay adds on top of it to charge MDR as intermediary? I also believe MDR is determined by banks and not intermediaries.

 

[Pavan]

GPAY credit card payments have 2.36% of MDR including GST

 

[Abhishek012]

This is news to me. UPI doesn't have MDR as far as I know as mandated by RBI. What Gpay adds on top of it to charge MDR as intermediary? I also believe MDR is determined by banks and not intermediaries.

You need to understand few things.

Currently, Gpay support visa/mastercard but payment mode use Bharat QR bar code.

Bharat QR is different from UPI QR.

Bharat QR is merger of all QR payments in India (Cards and UPI) but individually work on their own network.

To better understand, open your payzapp app and scan any Bharat QR bar code (Dnt scan UPI QR bar code)

Now you will see total 4 types of payment mode.

mvisa QR: 4xxxxxxxxxxxxxxx
Master QR: 5xxxxxxxxxxxxxx
RuPay QR: 6xxxxxxxxxxxxxxx
UPI QR: you will see merchant UPI ID.

Now next page, you need to select which payment mode you want to pay.

If you select Visa card then Visa QR will use or if you select RuPay card then RuPay QR payment mode will use or if you select UPI then UPI QR payment mode will use.

All payments work on seperate payment rail but merge on single QR.

Card payments through Bharat QR charged MDR fees.

Hope you understand.

Now come to UPI free MDR topic.

Note - UPI MDR is not 100% free.

Govt currently levy zero MDR only for P2P and P2M UPI payment.

UPI also have different types of payment.

If you have saving/salary/pension/Current account then only P2P UPI and P2M UPI MDR is free but if you have OD account (overdraft account) then 1.5% MDR applied.

If you subscribe Netflix, Discover+, Disney+ hotstart, Gaana etc via "UPI AutoPay" then Merchant will pay UPI AutoPay MDR fees.

Also International UPI payment charge MDR fees.

Now once UPI linked with RuPay credit card will launch. Upto 2% MDR fees will apply.

Because UPI link with Credit card is not a P2P UPI or P2M UPI. It will be called C2P UPI or C2M UPI (credit to person or credit to merchant).

Note - currently no MDR fees finalized yet for UPI link with Credit card but some sources told upto 2% MDR charges will applied and small merchants will get some exemption.

 

[rjsudeep]

Everyone is focusing on the whether the MDR charged is shown in the invoice or not. But you need to focus on whether the charges are incorporated in the service or the price of product.

For example, if you are purchasing some packaged products from a mall or a shopkeeper, they cannot increase the price of the product since it cannot be more than the MRP of the product. So here, the merchant will have to show MDR charges in the invoice also or he cannot charge you extra. If he shows, complaint against this to RBI ombudsman.

Lets take another scenario. If u use any services and have been charged by the merchant extra because you paid by your credit card, ask him to gove computerised bill. He will not be able to increase the price of services with the MDR. This is because these prices are feeded into the system earlier and cannot be changed everytime a customer comes for payment through credit card.

Regarding those who are saying nothing will happen, i just want to say it all depends on the amount of people complaining against these charges. MDR charges are to be levied in cases of credit cards..but not to end customer, to the merchant.

When so many people complaint against these charges, and if ombudsman has no idea on how to deal with these cases, they will be referred as feedback and suggestions to higher authorities in RBI to streamline processes related to these unsrupulous activities by certain merchants.

As on date, a very few complaints regarding this are received in ombudsman offices throughout the year. So no one in RBI is also bothered about it. Think about it..

Easy to say this, but you really can't argue when you're left with no choice, like in my case with the person being the only Tata Motors dealer across half the state. For a few hundred rupees or lesser, I'll end up in a major tangle. Similarly, people choose to just shut up and pay. Not saying its the right approach, but it is what it is.

 

[rjsudeep]

No through GPAY we have MDR charges

That's only for card payments through BharatQR right? UPI payments have zero MDR gPay or otherwise!

 

[rjsudeep]

You need to understand few things.

Currently, Gpay support visa/mastercard but payment mode use Bharat QR bar code.

Bharat QR is different from UPI QR.

Bharat QR is merger of all QR payments in India (Cards and UPI) but individually work on their own network.

To better understand, open your payzapp app and scan any Bharat QR bar code (Dnt scan UPI QR bar code)

Now you will see total 4 types of payment mode.

mvisa QR: 4xxxxxxxxxxxxxxx
Master QR: 5xxxxxxxxxxxxxx
RuPay QR: 6xxxxxxxxxxxxxxx
UPI QR: you will see merchant UPI ID.

Now next page, you need to select which payment mode you want to pay.

If you select Visa card then Visa QR will use or if you select RuPay card then RuPay QR payment mode will use or if you select UPI then UPI QR payment mode will see.

All payments work on seperate payment rail but merge on single QR.

Bharat QR through Card payments charged MDR fees.

Hope you understand.

Now come to UPI free MDR topic.

Note - UPI MDR is not 100% free.

Govt currently levy zero MDR only for P2P and P2M UPI payment.

UPI also have different types of payment.

If you have saving/salary/pension/Current account then only P2P UPI and P2M UPI MDR is free but if you have OD account (overdraft account) then 1.5% MDR applied.

If you subscribe Netflix, Discover+, Disney+ hotstart, Gaana etc via "UPI AutoPay" then Merchant will pay UPI AutoPay MDR fees.

Also International UPI payment charge MDR fees.

Now once UPI linked with RuPay credit card will launch. Upto 2% MDR fees will apply.

Because UPI link with Credit card is not a P2P UPI or P2M UPI. It will be called C2P UPI or C2M UPI (credit to person or credit to merchant).

Note - currently no MDR fees finalized yet for UPI link with Credit card but some sources told upto 2% MDR charges will applied and small merchants will get some exemption.

Brilliant info! This needs to be a thread of its own!

 

[TheTrickySid]

Everyone is focusing on the whether the MDR charged is shown in the invoice or not. But you need to focus on whether the charges are incorporated in the service or the price of product.

For example, if you are purchasing some packaged products from a mall or a shopkeeper, they cannot increase the price of the product since it cannot be more than the MRP of the product. So here, the merchant will have to show MDR charges in the invoice also or he cannot charge you extra. If he shows, complaint against this to RBI ombudsman.

Lets take another scenario. If u use any services and have been charged by the merchant extra because you paid by your credit card, ask him to gove computerised bill. He will not be able to increase the price of services with the MDR. This is because these prices are feeded into the system earlier and cannot be changed everytime a customer comes for payment through credit card.

Regarding those who are saying nothing will happen, i just want to say it all depends on the amount of people complaining against these charges. MDR charges are to be levied in cases of credit cards..but not to end customer, to the merchant.

When so many people complaint against these charges, and if ombudsman has no idea on how to deal with these cases, they will be referred as feedback and suggestions to higher authorities in RBI to streamline processes related to these unsrupulous activities by certain merchants.

As on date, a very few complaints regarding this are received in ombudsman offices throughout the year. So no one in RBI is also bothered about it. Think about it..

Also they ask to pay the MDR charge seperately.

For example. For 2% MDR on rs 100 product they ask to pay 100 via cc then rs 2 by cash or some other methods like UPI.

What can be done in such cases, the consumer becomes helpless and end's up paying the charges.

 

[rjsudeep]

Also they ask to pay the MDR charge seperately.

For example. For 2% MDR on rs 100 product they ask to pay 100 via cc then rs 2 by cash or some other methods like UPI.

What can be done in such cases, the consumer becomes helpless and end's up paying the charges.

Yeah, if we think the systems are smart, these people are smarter. They know of ways to get away with it, considering it saves them quite a bit when everything adds up annually.

 

[vysakh]

If u use any services and have been charged by the merchant extra because you paid by your credit card, ask him to gove computerised bill. He will not be able to increase the price of services with the MDR. This is because these prices are feeded into the system earlier and cannot be changed everytime a customer comes for payment through credit card.

Some experiences:

1. Getting something on MRP

Shopkeeper : Saar, credit card 2% extra
Me : Put it in bill, swipe whatever the bill amount is
Shopkeeper : Saar, not possible. Pay by cash or UPI.
Me: *walks out*
Shopkeeper : *doesn't care*



2. Getting something that's on sale

Shopkeeper : Saar, credit card 2% extra
Me : Put it in bill, swipe whatever the bill amount is
Shopkeeper : Saar, not possible. We can remove discount and pay full MRP on credit card
Me : Saar, not possible.
Shopkeeper : *silence*
Me : *walks out*
Shopkeeper : *doesn't care*

 

[amit]

The prime example is Beer bar and wine shops, they blatantly ask 1-3% extra charge for cc. try to get on video/audio while asking. Just turn on camera put it in your shirt left pocket facing camera to front (camera outside, screen inside) before doing the payment or before going to the counter.

 

[rjsudeep]

The prime example is Beer bar and wine shops, they blatantly ask 1-3% extra charge for cc. try to get on video/audio while asking. Just turn on camera put it in your shirt left pocket facing camera to front (camera outside, screen inside) before doing the payment or before going to the counter.

Wow, which state is this in? Never faced any issues in Karnataka despite regularly swiping at these locations, both large vendors and small shady ones.

Experienced it once in one particular store in Goa though. Nowhere else, even across the country wherever I've travelled.

 

[amit]

Wow, which state is this in? Never faced any issues in Karnataka despite regularly swiping at these locations, both large vendors and small shady ones.

MH

 

[Karthik:]

any customer who has been charged extra because of MDR can complain directly to the RBI ombudsman, and the ombudsman will take up the matter with the merchant's bank

Can a customer who have been demanded extra make a complaint ? I was demanded 2% extra for card payments by a TVS dealer. Didn't go for it. Opted for other modes. Otherwise, I think no one will be ready to pay extra to make a complaint. As I have seen, they normally ask for these extra charges only for large purchases through POS. So these charges might pinch a customer. And they don't charge for online gateway payments through cards.

Also they sometime reduce discount. An Apparel shop offered me 3% discount. But the same was not applicable for card payments.