The State Bank of Pakistan (SBP) has introduced a temporary cap on bank charges for card payments at fuel stations, setting new limits on the Merchant Discount Rate and Interchange Reimbursement Fee in an effort to encourage wider adoption of digital payments at petrol pumps across Pakistan. Under the new instructions, the Merchant Discount Rate has been capped at Rs1.00 per litre, while the Interchange Reimbursement Fee has been set at Rs0.20 per litre for all card-present transactions until January 31, 2027.
The instructions were issued by the State Bank of Pakistan through PSP&OD Circular Letter No. 01 of 2026 on August 3, 2026, and have taken effect immediately. The measure applies to all payment cards issued in Pakistan and covers transactions conducted at fuel stations. The central bank has directed relevant financial and payment sector entities to implement the revised pricing mechanism during the specified period.
The circular has been addressed to banks, microfinance banks, electronic money institutions, payment system operators and payment service providers. The latest instructions build on an earlier directive issued by the State Bank of Pakistan in 2023 concerning charges applicable to card payments at fuel stations. Through the new temporary limits, the central bank is seeking to reduce the cost associated with card-based transactions and create conditions that can encourage more fuel stations to accept digital payments.
The decision comes as petroleum dealers have raised concerns over the cost of accepting card payments. According to dealers, fuel stations currently pay bank charges of around 0.8% on card transactions, which is equivalent to approximately Rs2.40 per litre. They said these charges have acted as a barrier to the wider expansion of card payment facilities at petrol pumps, affecting both fuel station operators and banks seeking to increase card acceptance.
Under the new structure, the Merchant Discount Rate will be limited to Rs1.00 per litre, while the Interchange Reimbursement Fee will remain at Rs0.20 per litre. The revised limits are intended to ease the financial burden associated with card transactions and make digital payment acceptance more commercially viable for fuel station merchants.
Alongside the card payment measures, the State Bank of Pakistan has also directed regulated entities to actively engage with fuel station merchants to ensure the availability and enablement of Raast QR-based payment acceptance. The requirement covers payments for fuel and related purchases, giving merchants an additional digital payment option beyond conventional card transactions.
The push for Raast QR acceptance forms part of the broader effort to expand digital payment infrastructure across Pakistan. By encouraging financial institutions and payment service providers to work directly with fuel station merchants, the State Bank of Pakistan aims to increase the number of locations where customers can make payments electronically. Fuel stations represent an important retail payment environment because of their high transaction volumes and widespread presence across the country.
The State Bank of Pakistan has also indicated that it will revisit the instructions around January 31, 2027. The review will take into account the market response to the pricing mechanism and its impact on digital payment adoption. This provides the central bank with an opportunity to assess whether the revised charges have encouraged greater card acceptance and increased the use of digital payment methods at fuel stations.
The Pakistan Petroleum Dealers Association (PPDA) has welcomed the decision, describing it as a positive step for digital payments. The association said the measure would promote digital transactions while also contributing to greater financial literacy across the country.
For fuel station operators, lower transaction-related charges could make electronic payments more attractive and reduce some of the cost concerns associated with card acceptance. For customers, broader availability of card and Raast QR payment facilities could provide greater choice when purchasing fuel and related products.
The State Bank of Pakistan’s latest move therefore combines a direct reduction in card payment charges with a wider push for Raast QR acceptance. With the temporary pricing mechanism remaining in place until January 31, 2027, its effectiveness will ultimately depend on how banks, payment service providers and fuel station merchants respond to the revised framework and whether the lower charges translate into broader digital payment acceptance across the country.
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