Raise complaint against MDR inclusion in total bill

[DivyanshuD]

While purchasing many stuff I have faced issue where the vendor(shop owners) end up adding MDR amount i.e. 1-4% on my total bill when I try to pay via Credit Card. When I deny to pay extra charge as a customer they ask me either to pay via cash or UPI. Is this practise legal according to RBI? If no, then where can we raise official complaint against such vendors who are charging extra amount to customer which should be ideally payed by them.

 

[Bharatiya Nagrik]

There is no specific rule which prevents them from passing on the MDR charges to customers instead of bearing it themselves.
Also I feel it is only the small businesses which have very small profit margins not being in a position to bear those MDR charges. Hence they say either you pay the extra charge or don't buy with credit card and use cash or UPI.
The big business never charge the customer as they have a bigger margin and can absorb the charges.

 

[abhimarda]

It's not legal and prohibited by RBI. Infact the agreement between the bank and merchant specifically prohibits that and if it is complained and brought to notice to such bank, they may need to take action against the merchant. However, it's a long drawn process and the bargaining power will depend on market demand and supply. If there are multiple shops selling similar goods and one is accepting without extra charge, he will garner extra market and others will need to follow however it may just so happen that they build in this cost in the final price. Eg Those not accepting give it for 100 and the one accepting card gives at 102.

 

[Akusahil]

Same problem I face a week age.
A computer shop owner charged me extra 2% on credit card but they not mentioned in Bill. Like I purchased 2000rs product and they charged me 2040rs but in Bill they mentioned only 2000. I think In this case they are stealing taxes.
Can anyone guide me how to raise complain against that Shop owner.

 

[Skylar]

While purchasing many stuff I have faced issue where the vendor(shop owners) end up adding MDR amount i.e. 1-4% on my total bill when I try to pay via Credit Card. When I deny to pay extra charge as a customer they ask me either to pay via cash or UPI. Is this practise legal according to RBI? If no, then where can we raise official complaint against such vendors who are charging extra amount to customer which should be ideally payed by them.

When considering the vendor’s perspective, they experience profit loss due to Merchant Discount Rate (MDR).
However, no one willingly sacrifices their profit share because of payment gateways, especially when customers have multiple options but choose to pay with credit cards.

Instead of wasting time arguing with vendor, a practical approach is to encourage the use of UPI payments via RuPay cards if the vendor supports it. Alternatively, we can seek out shops that accept credit cards. And, when vendors realize that not accepting credit cards leads customers to other shops, they often begin accepting cards.

 

[swastikswaroop]

Same problem I face a week age.
A computer shop owner charged me extra 2% on credit card but they not mentioned in Bill. Like I purchased 2000rs product and they charged me 2040rs but in Bill they mentioned only 2000. I think In this case they are stealing taxes.
Can anyone guide me how to raise complain against that Shop owner.

I think the process is the following.

1. File complaint with the POS issuing Bank and wait for 30 days for them to resolve.

2. If they don't, then you file with RBI Banking Ombudsman.

 

[Skylar]

I think the process is the following.

1. File complaint with the POS issuing Bank and wait for 30 days for them to resolve.

2. If they don't, then you file with RBI Banking Ombudsman.

For 40/- rupees now you have to waste your time and energy, instead of this you could have argued with the vendor that day itself.

 

[Akusahil]

For 40/- rupees now you have to waste your time and energy, instead of this you could have argued with the vendor that day itself.

It's not about 40rs, it about showing low amount in bill to save gst in illegal way.

 

[Skylar]

It's not about 40rs, it about showing low amount in bill to save gst in illegal way.

From the vendor’s perspective, they are burdened with a Merchant Discount Rate (MDR) of 40. This fee is essentially what they need to pay to the bank. Importantly, MDR is not factored into the tax calculation.
In hindsight, it would have been prudent to question the vendor about the additional amount taken from you. Instead of paying it without inquiry, you could have addressed the discrepancy that day.

 

[_rohitsoni]

Even if RBI has a rule that merchants can't pass on MDR to their customers, Merchants have all the rights to deny you to sell goods on credit card. RBI can't force merchants to accept all type of payments, its up to that merchant for accepting mode of payments. Like, we don't accept CC payments even CC UPI as we know customers will not go away just because we are asking for payments on UPI.