Pakistan’s central bank has capped bank charges on digital payments for petroleum products, aiming to reduce costs for fuel stations and encourage wider adoption of digital transactions.
ISLAMABAD: The State Bank of Pakistan (SBP) has introduced a cap on bank charges for digital payments used to purchase petroleum products, responding to long-standing concerns from fuel station operators over high transaction costs.
The new policy limits the Merchant Discount Rate (MDR) for card-based fuel purchases to a maximum of Re1 per litre, while charges for payments made through Raast QR codes and other online payment methods have been capped at 20 paisas per litre.
Previously, banks determined transaction charges independently, with rates generally ranging from 0.7% to 1.5% of the transaction value. According to petroleum dealers, these charges translated into costs of approximately Rs3 to Rs4 per litre, significantly reducing already narrow profit margins.
Under the SBP notification, the Interchange Reimbursement Fee (IRF) for card transactions has also been capped at 20 paisas per litre.
The revised pricing framework will remain effective until January 31, 2027, covering all payment cards issued in Pakistan.
The central bank said the measure is intended to increase the acceptance of digital payments at fuel stations while accelerating the rollout of interoperable Raast QR-based payment systems across the country.
SBP has directed banks and regulated financial institutions to work closely with fuel stations over the next six months to ensure Raast QR payment facilities are widely available.
The central bank added that it will review the policy around January 31, 2027, after assessing market response and digital payment adoption.
The All Pakistan Petroleum Dealers Association (APPDA) welcomed the decision, describing it as a positive step towards expanding digital payments while cautioning that the revised charges remain higher than what dealers consider economically sustainable.
APPDA spokesperson Hassan Shah said previous transaction fees placed considerable pressure on dealers, whose fixed commission currently stands at Rs8.64 per litre.
He noted that after accounting for withholding tax and operating expenses, dealers had very limited margins, making high banking charges particularly difficult to absorb.
According to APPDA, petroleum retailers also face operational challenges due to Pakistan’s daily fuel pricing mechanism. Dealers typically receive fuel deliveries around 48 hours after placing orders, while official fuel prices are revised every 24 hours, creating pricing uncertainty and financial risk.
The association argued that fuel is an essential commodity and that lower digital payment costs would benefit both merchants and consumers by encouraging wider adoption of cashless transactions.
APPDA urged authorities to reduce the cost of Raast QR transactions even further, proposing either zero or significantly lower merchant charges compared with conventional card payments.
The association also recommended:
- Free QR payment onboarding for fuel stations.
- Technical support and staff training, particularly for smaller dealers.
- Consumer incentives such as cashback offers and reward programmes.
- Reliable, uninterrupted payment systems with rapid dispute resolution to support around-the-clock fuel station operations.
APPDA said lower transaction costs, combined with dependable payment infrastructure, would encourage both fuel retailers and customers to increasingly adopt digital payment methods.
The SBP’s revised pricing mechanism will remain in force until January 31, 2027, during which banks are expected to expand Raast QR payment acceptance at fuel stations nationwide.
The central bank will review the policy after the six-month implementation period to determine whether further adjustments are required based on market adoption and industry feedback.
