[//HB]

Originally Posted by libranof1987

Payment gateways (Visa, Mastercard, AmEx) charge the banks for use of their services for card payments which the banks pass on to the merchants. The charge varies from 2% (Visa, Mastercard) to ~3.4% (AmEx). These are indicative %.

Yes correct, this is also one of the reasons that you will find fewer outlets accepting Amex as the costs are higher.

Originally Posted by GTO

Luckily, we don't have to worry about it as the RBI has banned these extra charges.

Funny stuff this is GTO : while apparently "banned" by RBI ? But you will find many Govt.-owned entities (PSU's e.g. electricity distribution) charging convenience fee for those who pay by cards.

Originally Posted by blackwasp

I also don't like the fact that you got a 'kaccha' (rough) bill instead of the charges being included in the proper bill.

That was a 'kaccha' receipt, and yes that's just crooked - they should be up-front about it, e.g. by adding a convenience fee in your service invoice - that way atleast it's accounted for.

Originally Posted by Lobogris

The card companies and the banks are levying an exorbitant charge on the merchants for a service that doesn’t cost them too much to offer.

The interesting thing about this - budget 2019 actually proposed to do away with the MDR (merchant discount rates) i.e. the fees levied on card payments. While this may look great on paper for consumers, the reality is that someone has to bear the costs ? Payment gateways cannot be working for free, so obviously thy have to earn their bucks from someone, if the card payments are supposed to come at no cost to consumers. No one I have spoken to from the payment gateway companies really seems to have an answer to this, so it's a big joke to propose such stuff in budget without even having a roadmap of how you propose to achieve it.

[raja_ys]

This is cheap of a honda dealer to charge a 1% extra on cards. The Maruti car dealer in Kakinada, AP too charges extra on bill amount of 1% on debit cards and 2% on credit cards. Best way is to avoid such cheap dealers

[navpreet318]

Surprising that most of you are jumping guns and declaring the dealer cheap!

Point 1.: Government agencies charge convenience fees when paying via cards. Check it when you do your next electricity bill or your next train ticket via a credit card.

Point 2.: When this 1%-2.5% amount becomes 10% to 50% of the total dealer margin, it really pinches! If someone has card and a smartphone, you can easily have a UPI app too. Pay via that app and you'll be charged nothing!

[akg7091]

Originally Posted by libranof1987

Payment gateways (Visa, Mastercard, AmEx) charge the banks for use of their services for card payments which the banks pass on to the merchants. The charge varies from 2% (Visa, Mastercard) to ~3.4% (AmEx). These are indicative %.



I don't think there is any regulation on whether merchants can pass this charge on to the customers.

In the pre-demonetisation era, a lot of merchants (across industries) blatantly passed on this charge to customers who paid by card. Post, they're much more receptive. I have rarely come across a merchant who'll charge extra for card payments since Nov '16. I doubt Honda will make a lot of difference in this case.

Actually, the RBI specifically forbids this recovery of excess charges by merchants on payment by cards except for exempt merchants such as irctc, fuel retail stations and utility boards.

Complain to the acquiring bank ( name on the pos machine of the shop ) as all merchants sign an agreement with the acquiring bank not to pass on the MDR to the end customer. The merchant WILL lose the POS machine if the bank investigates this upon your complaint

Forgot to mention : It is legally allowed for the merchant to offer a discount for cash payment. So, if the invoice is INR 1000, the merchant is legally allowed to offer a discount for a particular payment mode ( say INR 999 ) but cannot charge more than the invoice unless specifically exempt by the RBI. In this case, the dealership should have a higher invoice amount to account for card payments and then give a 1.961% discount for cash payment

[Turbanator]

Originally Posted by navpreet318

Surprising that most of you are jumping guns and declaring the dealer cheap

Almost all Airlines when booking directly add Rs 250-300 on domestic tickets when paying by cards.

Yes, it pinches to pay for card charges or for that carry bag at many of the departmental stores.
I agree to UPI suggestion, it works brilliantly

[BlackMamba24]

I too faced the same situation two years back but didn’t pay any extra. As he was telling me this is RBI rule that customer has to pay and then I told him that I work in RBI he backed off. Also for PSU’s it’s not them who is charging while we pay our bills instead it is the gateway who charges extra.

[dicor]

Originally Posted by fazayal

One thing I am not able to understand is that if government/RBI doesn't want private merchants to charge extra on card payments why do they do it themselves for government services?

Few days back I opened an NPS (National Pension Scheme) account. When I tried to pay using my credit card, I was being asked to pay Rs. 500 extra.

The same thing happens if you want to recharge your UTS (Unreserved Ticketing System) wallet using your credit card. They charge something extra.

I am not sure about the above services but when I pay my MSEB bill, it asks me for convenience charges for bill above Rs 500. However, if I pay by debit card / net banking, UPI, Wallet, there are no charges. Same for IRCTC.

Even prepaid Fasttag, 1% transaction charges are being levied by banks.

Originally Posted by BlackMamba24

I too faced the same situation two years back but didn’t pay any extra. As he was telling me this is RBI rule that customer has to pay and then I told him that I work in RBI he backed off. Also for PSU’s it’s not them who is charging while we pay our bills instead it is the gateway who charges extra.

Haha. I had said the same and he asked me to not buy glasses from him.

My personal view here is that dealership should bear these charges from their own pocket as cashless transactions help them in getting more revenue to the business. You might have noticed some grocery shops have great interiors yet they sell Parle-G at MRP. Do they charge customers for their shop's beautification? No, they did it to pull more customers.

1. Swipe machines / UPIs / EMI schemes help merchants to bring more customers.
2. Apparently merchants have to handle less cash, avoiding employees to steal unaccounted money (especially in the service industry). A barbershop in my vicinity offers a 10% discount on all types of cashless transactions. It's just another way of implementing "if you don't get a bill your food is free"
3. Saves the trips to the bank, which saves their fuel, finding a trustworthy guy to handle cash.
4. Increase safety and security from being robbed on the way or in the shop.

If merchants have to shell out an extra 1-2% for this, they should happily do it in favor of the above benefits. If they can't, I am free to find another merchant resuting in their own loss.

[BlackMamba24]

Also in context to above, it is NPCI that charges for these transactions because it provides all the safety of these transactions. Merchant asks customers just because we are not completely aware and they know that.