SBP Caps Card Charges at Petrol Pumps

The State Bank of Pakistan (SBP) has introduced a cap on bank charges for card payments at fuel stations, fixing the Merchant Discount Rate (MDR) at Rs1.00 per litre and the Interchange Reimbursement Fee (IRF) at Rs0.20 per litre for all card-present transactions until January 31, 2027. The move is aimed at accelerating the adoption of digital payments at petrol pumps across the country.

The new directives were issued through PSP&OD Circular Letter No. 01 of 2026 on August 3, 2026, and apply to all payment cards issued in Pakistan with immediate effect.

The circular, addressed to banks, microfinance banks, electronic money institutions, payment system operators and payment service providers, builds upon PSP&OD Circular Letter No. 01 of 2023, which previously dealt with the same matter.

SBP has instructed all regulated entities to actively work with fuel station operators to ensure the widespread availability and implementation of Raast QR-based payment facilities for fuel purchases and other related transactions during the implementation period.

The central bank stated that it will review the policy around January 31, 2027, after assessing the market's response to the revised pricing structure.

According to petroleum dealers, fuel stations currently pay bank charges of around 0.8% on card transactions, equivalent to nearly Rs2.40 per litre. They noted that the higher transaction costs had discouraged both banks and fuel station owners from expanding card payment services.

The Pakistan Petroleum Dealers Association (PPDA) welcomed the SBP's decision, saying the reduced charges would encourage digital payment adoption and help improve financial inclusion and digital literacy across Pakistan.