What is surcharge , and why do I see surcharge on my card from my petrol pump ?

Modified on Fri, 16 Jul 2021 at 10:11 AM

Let's first understand how bank and card companies make money from cards. 

Whenever a card is swiped on a petrol pump or a card is used for online purchase on Amazon, the petrol pump or Amazon ( merchant ) only gets about 98 % of the Invoice amount or billing amount, or Rs. 98 for invoice of Rs. 100. If you filled petrol of Rs. 100, the petrol pump owner only gets Rs. 98. The percentage depends on card issuing bank, card network, merchant negotiations, card type, and multiple other parties involved in the whole ecosystem. The merchant only get 97% on Amex cards, and the merchant gets around 99.5% on debit cards.

The Petrol Pump, Government Portals, and few other entities have special deals with the card issuing banks, as they want the entire 100% of Invoice amount. To facilitate, the banks put a surcharge on customer's cards, and hence there would be two transactions on customer's card - billing amount, and second surcharge. The surcharge on Karbon card is anywhere from 1% to 2.2% on petrol pumps and MCA portal. Kindly note that Karbon does not make any money from surcharge. It simply passes the surcharge amount to MCA or petrol pump. 

This might seem unfair, and confusing. You might want to speak to petrol pump owner or MCA portal helpline to understand their surcharge or fees.

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