We’re pretty sure that some of you might have had this experience before. You head to a retails shop, pick a bunch of stuff that you want to buy and head to the cashier to pay. Instead of paying cash you decide to use your card because, you know, you want to get as many points as possible (or you just don’t like carrying too much cash on you).
Everything seems fine and dandy until the cashier tells you that she’ll have to charge you a surcharge or extra to use your credit card. For most of us, the charges don’t amount to much and we’d just ignore but sometimes they’d hit us with a percentage of the charge and we’d be livid. Granted such cases are rare, that doesn’t mean it doesn’t happen.
The question then is, are retailers actually allowed to do this? Apparently, they’re not. According to Bank Negara Malaysia (BNM), THE leading financial authority in Malaysia, they have clarified that such charges are not supposed to be done.
The statement was in response to Deputy Finance Minister I Datuk Othman Aziz comments in Parliament that there would be no abolishment of interest charges on credit cards.
If it’s not allowed you might be wondering why some retailers still insist on putting in a surcharge. That’s because of the Merchant Discount Rate (MDR) that is incurred by the retailer whenever a credit card is used for payment. MDR is the rate charged to a merchant (retailer) for payment processing services on debit and credit card transactions. The merchant must set up this service and agree to the rate prior to accepting debit and credit cards as payment.
This means more cost to a retailer whenever he processes a sale with credit cards. Retailers who usually incur a surcharge to you do so to offset the cost they incur from MDR. However, based on BNM’s Payment Card Reform Framework (PCRF), the retailers are not allowed to do so.
“The prohibition on surcharges is monitored and enforced by banks that provide e-payment facilities to merchants (acquiring banks),” BNM said in the statement.
While it does kind of suck for retailers, especially smaller one with low margins, the fact of the matter is they just can’t impose a surcharge, or they’d risk action by BNM.
So what do you do if you encounter a merchant or retailer that still imposes a surcharge? You can lodge a complaint to the bank or financial institution that process the merchant or retailers payment. Just keep the receipt, which would usually have the bank’s name and details.
You could also contact BNM direct via phone at 1300-88-5465 or sending an email to [email protected]
Source: The Edge