RBI leaves credit-card surcharge terms to merchant and payments contracts
Merchants may levy disclosed credit-card convenience fees under their agreements with banks, payment providers and card networks, while debit-card MDR cannot be passed to customers. RBI has not issued specific directions on credit-card surcharges.
What happened
retail-company · RBI says it has not issued specific directions on credit-card surcharges, leaving terms to merchant, bank, payment-provider and card-network
Key facts
- 2% credit-card surcharge
- one month for card issuer response before RBI Ombudsman escalation
Why this matters
Prioritize partnerships with acquirers and payment platforms offering flexible, compliant credit-card surcharge capabilities and clear customer-disclosure tooling.
What to watch
- Updated RBI circulars, FAQs or enforcement actions addressing credit-card convenience fees.
- Card-network or acquirer contract amendments governing surcharge eligibility, maximum rates, disclosure language or merchant categories.
- Consumer complaints, social-media backlash, chargebacks and cart-abandonment changes after fee disclosure.
- Growth in UPI and debit-card share at merchants that introduce card fees or payment-method incentives.
- State or central consumer-protection actions concerning drip pricing, hidden fees or checkout disclosures.
- Competitor announcements of credit-card fees, cash/UPI discounts or card-specific pricing.
- Review acquiring-bank, payment-gateway and card-network agreements for surcharge permissions, caps, merchant-category exclusions and disclosure specifications.
- Quantify card acceptance cost by network, card type, ticket size, channel and customer segment before setting any convenience-fee policy.
- Test checkout disclosures that show the fee before payment selection and offer frictionless UPI/debit alternatives.
- Use targeted payment steering—UPI incentives, debit-linked offers, account-to-account options and loyalty rewards—where explicit surcharging risks conversion losses.
- Prepare customer-service scripts, refund handling and receipt/invoice formats that clearly separate product price and disclosed payment fee.
- Monitor competitors for surcharge adoption, especially in high-ticket, low-margin and online-first categories.