The State Bank of Pakistan (SBP) has scrapped the 1.5 percent minimum fee being charged by financial institutions from merchants on transactions done through credit and debit cards.

Previously the Merchant Discount Rate (MDR) for Point of Sale (POS) acquiring in Pakistan was within the range of 1.5 percent – 2.5 percent for both existing and new merchants. However, through a circular issued on Friday, the central bank has abolished the minimum fee of 1.5 percent.

Moreover, the SBP has also revised the Interchange Reimbursement Fee (IRF) for cards issued in Pakistan used on domestic POS terminals. For debit and prepaid cards the maximum fee would be 0.2 percent (down from the previous 0.5 percent) and for credit cards the fee has been capped at 0.7 percent.

Further, the central bank has directed all e-commerce and online payment acquirers operating in Pakistan to enable acceptance of Domestic Payment Scheme (DPS) card for card-not-present (CNP) transactions on their respective payment gateways by June 30, 2023.

The latest circular said that all other instructions on the subject will remain the same.

It is pertinent to mention here that Oil Marketing Companies (OMCs) have repeatedly requested the State Bank of Pakistan (SBP) to revise the bank charges on the sale of petroleum products through credit and debit cards as it reduces their margins and margins of petrol pump owners and operators.

Source: Pro Pakistani