What can we do if a merchant is demanding 2% on credit card payment? | DesiDime (2024)

saucap

Rajkotian

You can complaint about it to the bank who issued POS device to them/consumer forum near you.

It's compulsory to show the sign that they are accepting cards if they do possess the POS device and accept it without any charges.

Vaastav

2023-03-23

Say You won't take the bike if they'll charge 2%

It might Work 🤣

babayanga5

From a team BHp post:

Offline Charges (When you swipe your card at a store) :

Debit Cards:

In India Debit Card charges on offline modes are controlled by the RBI.

For Transaction less than Rs 500 - 0.25% of transaction value (Waived of till 31st Dec 2019)

For Transaction between Rs 501 and Rs 2000 - 0.5% of transaction value (Waived of till 31st Dec 2019)

For Transactions above Rs 2000 - 1% of transaction value

Credit Cards:

The MDR’s for credit cards however are deregulated. The RBI doesn't control them. This is because in addition to the cost of processing the transaction, credit card issuers need to recover the cost of the credit also which they have extended to the user. Generally you will find credit card MDR’s to be in this range:

VISA / MasterCard Non Premium Cards - 1.25% to 2%

VISA / MasterCard Premium Cards - 1.75% to 2.5%

American Express Cards - 2.5% to 3.5%

Online Charges (When you enter card details on a website / mobile app):

These charges are again deregulated and depend on a lot of factors. A general rule is to add 0.25% to 0.5% extra to the offline charges to determine the online charge. This is because online transactions (known as CNP - Card Not Present) are inherently more susceptible to fraud and so the issuing bank needs to cover for that as well.

Wherever deregulated, charges are negotiable based on the expected transaction volume and the nature of your business. In addition to these variable charges you may need to pay the cost / rental of the swipe machine (offline) and integration costs (online)

guanidine7865

2023-03-23

guest_999

Rajkotian wrote:

You can complaint about it to the bank who issued POS device to them/consumer forum near you.

It's compulsory to show the sign that they are accepting cards if they do possess the POS device and accept it without any charges.

That's not how it works. It depends on the specific agreement that merchant has signed with that specific PoS provider in shop. Big retailers have much more bargaining power so they get such extra charge waived off in their agreement resulting in no extra charge when paying via cc.

sachiru

2023-03-23

guanidine7865 wrote:

Ask another bike showroom of same company (preferably a bigger dealer, they are less fussy than lala type showrooms).

It's a tier 3 town with only one Yamaha showroom , next near is 200kms away.

sachiru

2023-03-23

guest_999 wrote:
That's not how it works. It depends on the specific agreement that merchant has signed with that specific PoS provider in shop. Big retailers have much more bargaining power so they get such extra charge waived off in their agreement resulting in no extra charge when paying via cc.

Last month I even saw a Tata car showroom wherein asking an extra 2 percent charge for CC swipe. Does the agreement format change individually for each merchant. Just a doubt.

guest_999

sachiru wrote:

Last month I even saw a Tata car showroom wherein asking an extra 2 percent charge for CC swipe. Does the agreement format change individually for each merchant. Just a doubt.

Tata car showroom does not mean agreement is between Tata & PoS bank unlike Tata Croma stores where agreement is between Tata & PoS banks.

Agnivo007

janardhanan29824

2023-03-24

guest_999 wrote:
That's not how it works. It depends on the specific agreement that merchant has signed with that specific PoS provider in shop. Big retailers have much more bargaining power so they get such extra charge waived off in their agreement resulting in no extra charge when paying via cc.

Big retailers have bargaining power to reduce it, but can't waive it of completely they will also be charged around 1%. But no merchant is allowed to charge anything to the customer, irrespective of whether they are big or small. If you file a complaint with RBI and the POS provider ombudsman. They will cancel the machine and also black list the pan used to get that machine. So they can't get the machine from a different provider also. Explain the rules clearly to the showroom.

urmila.contact

2023-03-24

sachiru wrote:

It's a tier 3 town with only one Yamaha showroom , next near is 200kms away.

1 Percent can be recovered upon billpayment

Ramta_Jogi

Rajkotian

guest_999 wrote:
That's not how it works. It depends on the specific agreement that merchant has signed with that specific PoS provider in shop. Big retailers have much more bargaining power so they get such extra charge waived off in their agreement resulting in no extra charge when paying via cc.

Ofcourse, large enterprises have bargained agreement and MDR. But here we are discussing about the normal merchants who pays regular MDR.😅

Basic remains same, no one can charge extra fees for the card swipe.

rn09

Rajkotian wrote:

Ofcourse, large enterprises have bargained agreement and MDR. But here we are discussing about the normal merchants who pays regular MDR.😅

Basic remains same, no one can charge extra fees for the card swipe.

"Basic remains same, no one can charge extra fees for the card swipe"

curious. why so? Is there a law/rule that they can't charge extra on card swipe.. either debit or credit?

Bk100

rn09 wrote:
"Basic remains same, no one can charge extra fees for the card swipe"

curious. why so? Is there a law/rule that they can't charge extra on card swipe.. either debit or credit?

There is no prohibition to charge extra for credit cards or deny accepting credit card payment completely.

People misunderstood this.

Shop keep has right to accept or any payment method or charge extra for some payments.

Paytm charges more if you pay by cc for gift card where as other methods are free.

------

Bk100

Ramta_Jogi wrote:

Charging fees for credit card swipe is no longer illegal. It's only for debit card.

It was never been illegal. Earlier very few cc was in circulation so merchants not bothered to charge. But now cc usage jumping there operating expenses jumped related to cc jumped a lot. So now slowly all institutions and merchants started to charge it now.

Cc user is using credit facility for payment. So there is nothing wrong if he bears some costs merchant incurring.

CoolRewards

Okay, all you need to do is buy some small item from that shop. Know which bank swipping machine they have or what's their settlement acc (it's written on the top of the machine or on the chargeslip).

Google "xyz bank merchant customer care" or "xyz edc customer care" or "xyz pos customer care"

And call them and tell them that they are charging it.

If you want to get their machine cancelled, buy it at 2%fees, and then email that chargeslip to the bank. Bank will cancel their machine.

Rajkotian

rn09 wrote:
"Basic remains same, no one can charge extra fees for the card swipe"

curious. why so? Is there a law/rule that they can't charge extra on card swipe.. either debit or credit?

Yes, It's a rule. I have seen many establishments fined for violating the same.
Not only this, there are many such rules and regulations that people are not aware of.

Sample Form of BOB: https://www.bobfinancial.com/documents/Applicat...

Screen Shot for the same:

You can find such agreements from various banks and confirm.

Rajkotian

Bk100 wrote:

It was never been illegal. Earlier very few cc was in circulation so merchants not bothered to charge. But now cc usage jumping there operating expenses jumped related to cc jumped a lot. So now slowly all institutions and merchants started to charge it now.

Cc user is using credit facility for payment. So there is nothing wrong if he bears some costs merchant incurring.

It was illegal and still is despite the Debit/Credit Card.
@Ramta_Jogi

Rajkotian

CoolRewards wrote:

Okay, all you need to do is buy some small item from that shop. Know which bank swipping machine they have or what's their settlement acc (it's written on the top of the machine or on the chargeslip).

Google "xyz bank merchant customer care" or "xyz edc customer care" or "xyz pos customer care"

And call them and tell them that they are charging it.

If you want to get their machine cancelled, buy it at 2%fees, and then email that chargeslip to the bank. Bank will cancel their machine.

If you are doing that, insure that you are getting the invoice as well.
Actually, small vendors can't afford 1/2% MDR charged by the bank. But they do possess it for the convenience of the customers or the emergencies.
These fees go up to 4-5% when you swipe your Dinners/Amex card. Many merchants might not be doing business with that much high-profit margin. They only get to know the exact settlement amount after 1-2 days.

CoolRewards

Rajkotian wrote:
If you are doing that, insure that you are getting the invoice as well.
Actually, small vendors can't afford 1/2% MDR charged by the bank. But they do possess it for the convenience of the customers or the emergencies.
These fees go up to 4-5% when you swipe your Dinners/Amex card. Many merchants might not be doing business with that much high-profit margin. They only get to know the exact settlement amount after 1-2 days.

Settlement is next day for all banks. Except for icici and few other which settle the same day.
Maximum fee is 3% for Amex card.

Bk100

Rajkotian wrote:
It was illegal and still is despite the Debit/Credit Card.
@Ramta_Jogi

It is not illegal if I say I don't accept credit card is not mode of payment in my shop. You can simply pay me with upi / debit card or cash. In my merchant agreement only debit card is mentioned. There is no mention of credit card in my agreement . These agreements can be customised between bank and merchant.

Rajkotian

Bk100 wrote:

It is not illegal if I say I don't accept credit card is not mode of payment in my shop. You can simply pay me with upi / debit card or cash. In my merchant agreement only debit card is mentioned. There is no mention of credit card in my agreement . These agreements can be customised between bank and merchant.

Bro, right now we are discussing the OP's concern with the Dealer, he is accepting the Credit Card. Now, when you have a customized agreement with the bank, then we can't generalize it.😅

The rule says if you are accepting the card, then it must be clearly displayed in your business establishment.

Also, as you said many merchants when don't want to accept the card then they simply say that the machine is not working/having a network issue/etc.😬😂

Check this link by Kotak for the same:
https://www.kotak.com/en/knowledge-centre/why-s...

Rajkotian

CoolRewards wrote:
Settlement is next day for all banks. Except for icici and few other which settle the same day.
Maximum fee is 3% for Amex card.

Sorry, forgot to mention the International Amex which attracts 4-5%.

Ramta_Jogi

CoolRewards wrote:
. Bank will cancel their machine.

Nahi hota kuch.

We have 5 Pos machines at our accommodation and offices. And we charge it to all. Some complained. Banks called up as a formality. We told them to take their machine if they want. Banks didn't follow up.

Bk100

Ramta_Jogi wrote:

Nahi hota kuch.

We have 5 Pos machines at our accommodation and offices. And we charge it to all. Some complained. Banks called up as a formality. We told them to take their machine if they want. Banks didn't follow up.

Use the word - convenience fee for letting customer to allow to use his cc for payment as our establishment dose not have cc as payment option.

Fix banner in cash counter that allowed mode in this shop is upi / debit card and cash. Other mode of payment will attract convenience fee.we may allow customer other mode of payment if he agrees to pay convenience fee for those transactions.my shop my rules.It is as simple as it.

Ramta_Jogi

Bk100 wrote:

Use the word - convenience fee for letting customer to allow to use his cc for payment as our establishment dose not have cc as payment option.

Fix banner in cash counter that allowed mode in this shop is upi / debit card and cash. Other mode of payment will attract convenience fee.we may allow customer other mode of payment if he agrees to pay convenience fee for those transactions.my shop my rules.It is as simple as it.

Yeah. Done all that so that customer(s) know it before hand.

It's actually pretty simple. It doesn't or may not seem much to customer paying 3 percent of 3k (90-100 rupee) but for 1 crore worth of payment received.. You are talking of a whopping 3-4 lakh of outgo in unnecessary expenses.

Bk100

Ramta_Jogi wrote:

Yeah. Done all that so that customer(s) know it before hand.

It's actually pretty simple. It doesn't or may not seem much to customer paying 3 percent of 3k (90-100 rupee) but for 1 crore worth of payment received.. You are talking of a whopping 3-4 lakh of outgo in unnecessary expenses.

It depends upon how much margin we are getting in our trade. Mrp of products are always higher and what rate we are offering to customer. If margins 30 to 40 % plus then there is no need ask 2% from customer. If hard bargain happens and profit margin is bellow 15 % then I am very particular about payment methods. Usually I don't give them pos option at all.