RBI rules bar debit-card surcharges, while credit-card fees remain merchant-led

Indian retailers cannot pass debit-card MDR charges to customers under RBI directions. Credit-card surcharges have no RBI-set cap, but any convenience fee should be disclosed before payment and follow the merchant’s card-acceptance agreement.

— Source publishedThu, 10 Sept, 2026, 18:18 IST·First seen Thu, 10 Sept, 2026, 18:50 IST·Source Financial Express · BrandWagon

What happened

Reserve Bank of India · RBI rules prohibit Indian merchants from passing debit-card MDR to customers, while credit-card surcharges have no specific RBI cap and

Key facts

  • 2%
  • 2-3%
  • 0.40%
  • Rs 200
  • 0.30%
  • 0.90%
  • Rs 1,000
  • 0.80%
  • Rs 20 lakh
  • Rs 30 lakh
  • Rs 3 lakh

Why this matters

Payments-platform and merchant-services targets with compliant fee-disclosure tools and lower-cost payment-routing capabilities gain strategic relevance.

What to watch

  • RBI clarifications, supervisory actions or bank/acquirer notices specifically addressing convenience fees and debit-card MDR pass-through.
  • Card-network rule updates on credit-card surcharging, merchant notification, maximum fee levels or prohibited merchant categories.
  • Consumer complaints, social-media incidents or enforcement involving fees charged after card selection or fees applied to debit cards.
  • Payment-mix changes toward UPI, debit or cash following clearer credit-card fee disclosure.
  • Acquirer repricing of MDR, gateway fees or settlement terms for retailers that discontinue debit-card surcharges.
  • Audit every checkout, invoice and payment-link flow for debit-card fee pass-through, including fees embedded in 'convenience,' 'platform,' 'handling' or 'service' charges.
  • Configure payment routing to identify debit, credit, prepaid and UPI instruments before fee calculation; retain transaction-level evidence of compliance.
  • Review merchant-acquirer and card-network agreements before applying any credit-card fee, including category, amount, disclosure, refund and receipt requirements.
  • Use transparent pre-payment fee disclosure and present lower-cost payment alternatives, especially UPI, without steering language that could create consumer-protection risk.
  • Model margin impact by tender type: debit-fee removal may raise acceptance costs, while selective credit-card fees could shift mix toward UPI and debit.