look news india
credit card fees : There is important news for the customers of Yes Bank and IDFC First Bank. From May 1, customers of these banks will have to pay more to pay utility bills. Sources say that due to misuse of personal cards by customers and low MDR, some other banks may also follow this decision in the coming days. MDR refers to the fee that payment gateways charge businesses for each credit card transaction.
Yes Bank and IDFC Bank have recently announced that they will charge a new fee of 1 percent on credit card bill payments. That is, if your electricity bill is Rs 1,500 and you pay through Yes Bank and ICFC First Bank credit cards, you will have to pay Rs 15 extra. However, Yes Bank customers will have a limit on free usage. Rs 15,000, while IDFC Bank customers will have a free usage limit of up to Rs 15,000. In case of Rs. This amount will be Rs 20,000. This means that if you have a Yes Bank credit card, you will not have to pay any extra charges for utility bills below Rs 15,000 in a statement cycle. But if you pay a bill of more than Rs 15,000, then along with 18 percent GST, you will also be charged one percent extra charge. The same rule applies to IDFC First Bank Credit Card also. However, the limit for free usage is Rs 20,000.
Why did the fees increase?
The question is why banks are charging this fee. There are two reasons for this. The first reason is that the merchant discount rate i.e. MDR is low. MDR is the fee that payment gateway companies charge on every credit card transaction. MDR varies across different categories. MDR in utility bill payments is lower than other categories. This means that when you pay utility bills through credit cards, banks earn less. There is also a fear that some companies may misuse personal credit cards to pay utility bills related to their business. Generally, the utility bill of any household is less than the credit limit on the personal card. In such a situation, companies can take advantage of it. Additional charges will curb this.