Rupay Credit Card: Interchange fee is a charge that the merchant’s bank pays to the bank that has issued the card. Currently, it depends on the combination of the merchant’s category and the credit card category.
Credit Card Fee: If you also use a credit card then this news is for you. NPCI i.e. National Payment Corporation of India is going to increase the interchange fee for Rupay credit card from May 1 next month. This will be applicable on both domestic and international transactions.
According to the circular, all variants of Rupay credit card, such as Classic, Platinum and Select, are going to have an increase in their interchange fee. GST will also be levied on this interchange fee based on a multiplier of 1.1092. After this change, small merchants may have to pass on the cost burden to consumers, which may affect their expenses. Because usually the interchange fee is paid by the acquiring bank to the card issuing bank.
What is interchange fee?
Interchange fee is the charge that the merchant’s bank pays to the bank that has issued the card. Now the question is whether the interchange fee has to be paid by the common man? So the answer is – no. This interchange fee is not directly levied on the consumer, that is, you, but is paid by the merchant’s bank (acquiring bank) to the card issuing bank to process the transaction every time any customer uses a debit / credit card to make a purchase from the merchant’s store.
That is, this charge is not directly levied on the customer, but the merchant adjusts it in his margin. But when this charge increases, it is possible that the merchant will pass on this expense to the consumers. But pass it on.
How much is the interchange fee currently?
Experts say that the interchange fee on existing credit cards is not fixed. At present, it depends on the combination of the category of merchant and the category of credit card. According to Ramakrishnan Ramamurthy of digital commerce business Worldline India, the current interchange rates of RuPay credit card are at par with other payment networks like MasterCard and Visa.
According to Ramamurthy, currently on an average RuPay credit card has an interchange fee of about 1% for utility merchants and 1.7% for most transactions on e-commerce platforms. The highest interchange fee is generally levied on the travel category, which ranges between 1.7% to 1.8%.
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