Retailers Are Not Supposed To Charge You Extra For Card Payments, Says Bank Negara

The central bank has spoken.

The leading financial authority in the country has finally spoken.

Bank Negara Malaysia (BNM) in a statement on Wednesday, 21 March, clarified that retailers are not permitted to impose extra charges on card payments.

BNM, as quoted by The Edge Markets, was replying to comments made by Deputy Finance Minister I Datuk Othman Aziz in Parliament last week that there would be no abolishment of interest charges on credit cards.

Othman said by removing charges would only encourage Malaysians to spend more.

The central bank said retailers commonly apply a surcharge for card payments to recover the cost - also known as the Merchant Discount Rate (MDR) - incurred by them when accepting card payments

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However, BNM's Payment Card Reform Framework (PCRF) does not allow retailers to impose a surcharge on debit card payments and similar constraints have been placed on credit cards issued by international card schemes such as Visa and Mastercard.

"The prohibition on surcharges is monitored and enforced by banks that provide e-payment facilities to merchants (acquiring banks)," it said.

BNM added that the MDR credit card was higher than MDR for debit card.

BNM noted that other countries have adopted different approaches in dealing with the issue of surcharges imposed by retailers for card payments

In the European Union and United Kingdom, retailers are prohibited from imposing a surcharge on credit and debit card transactions. However, retailers in Australia have the right to impose a surcharge for credit card payments.

"The rationale of such approach is to send the correct price signal to encourage consumers to pay using the more cost-effective debit card," the central bank said.

Nevertheless, BNM advised consumers who encounter merchants that impose surcharges to lodge a complaint with their respective banks or payment card issuers

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You can also give BNM a call at 1-300-88-5465 or visit the website for more info. 

Have you ever encountered retailers that impose extra charges for card payments? Let us know your experience in the comments section below.

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