Cards Accepted, but with higher charges

Recently, Banknet had conducted a customer survey on Payment Products (i.e. Internet / Mobile Payments, Credit/Debit Cards, ECS and the likes).

Banknet survey showed that most people who have an ATM-cum-Debit card still use cash for making payments. Survey tried finding the reasons.

Survey found that when paying for Railway Bookings or at petrol pumps, banks charge 2.5% of the transaction value to the customer. In case of smaller merchant establishments, the merchants do not seem to afford paying transaction fees of 2% to card issuers/banks. So they pass on this cost to the customer so that their small margins are not affected.

The end customer thus prefers withdrawing cash from ATMs rather than paying 2 to 2.5% extra by swiping their cards, especially for higher value payments.

Hope these findings give banks/RBI some insights..