Key Takeaways
- State Bank of Pakistan introduces capped transaction charges for digital payments.
- Merchant Discount Rate capped at Rs. 1 per litre, IRF limited to Rs. 0.20 per litre.
- Initiative aims to boost digital payments in the fuel sector and enhance financial inclusion.
The State Bank of Pakistan (SBP) has unveiled new measures to promote digital transactions at petrol stations across Pakistan, aiming to reduce transaction costs and encourage wider adoption of electronic payment methods.
Under the new framework, the Merchant Discount Rate (MDR) for debit and credit card transactions will be capped at Rs. 1 per litre, while the Interchange Reimbursement Fee (IRF) will be limited to Rs. 0.20 per litre for fuel purchases and related products.
The central bank has also instructed commercial banks to collaborate with fuel station operators to facilitate Raast QR-based payment acceptance, enabling customers to pay digitally using Pakistan’s instant payment system.
Digital payments analyst Abdus Samad Khan stated that the initiative will encourage fuel stations to install more Point-of-Sale (POS) terminals and QR payment facilities, enhancing convenience for consumers while reducing cash handling and associated security costs in the petroleum sector.
The move is part of an effort by the SBP to accelerate digital payments in one of Pakistan’s most cash-intensive sectors. Currently, over 15,000 fuel stations operate across the country, with POS terminals concentrated primarily in major urban areas, limiting card acceptance in many locations.
Petroleum dealers welcomed the State Bank of Pakistan’s decision, calling it a significant step towards promoting digital payments and financial inclusion. The Pakistan Petroleum Dealers Association (PPDA) chairman Malik Khuda Baksh noted that fuel stations currently pay approximately 0.8 percent in bank charges on card transactions, translating to about Rs. 2.40 per litre.
These high fees have long discouraged both petrol pumps and banks from expanding card payment infrastructure. The PPDA’s demand for a complete waiver was formally raised during a meeting with officials from the Oil and Gas Regulatory Authority (Ogra) and the government in late July, but the SBP has now honoured its commitment to reduce transaction costs.
According to the latest data from the SBP, 68.3 million payment cards are currently in circulation in Pakistan, with card usage continuing to rise, particularly in the retail sector. The new incentives will remain in effect until January 31, 2027.
Although our demand was for zero percent charges, we appreciate this initiative and believe that, in consultation with the PPDA, the charges will be reduced further in the future.
Malik Khuda Baksh, PPDA Chairman
