Narrating the incident, she said, “I was not carrying enough cash, so I wanted to pay by credit card. But when I was told to shell out about Rs 150 more, I made the payment by cash. If not, I would have lost out on a good deal.”
This practice of charging an additional fee is called ‘surcharging,’ said Mr Subrat Pani, Business Head-Cards, Kotak Mahindra Bank. It is not permitted as per the agreement entered into by the merchant and the bank, which sets up the point-of-sales machine. “It is not permitted as per Visa and MasterCard rules. The acquiring bank can terminate the POS facility,” Mr Pani said.
When a bank sets up a POS machine, it charges a merchant fee from the merchant establishment, for swiping debit or credit cards. In some cases, the merchants try to pass on this charge to the customers by charging extra. Complaint option
Mr Sachin Khandelwal, Head, Retail Assets, ICICI Bank, said, typically, the stores that insist on an additional fee in case of a credit or debit card transaction are those that don’t get a lot of business through cards. Larger shops don’t charge extra fees because they get about 35-40 per cent from cards and don’t wish to lose customers, he said.
“Merchants are not supposed to charge any extra fee for using credit cardWe do get such complaints. We then send out a warning and even withdraw the terminal if the charges are found to be true,” he said.
Mr T.V. Seshadri, Vice-President, and Country General Manager, South Asia, MasterCard, said that in cases of surcharges or other discrimination, cardholders should report about the merchant to their respective card issuing financial institution and may also intimate MasterCard.
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