State Bank of Pakistan Moves to Improve Digital Payments at Petrol Stations
New circular extends lower payment processing charges and encourages wider adoption of Raast QR and card payments at fuel stations.
State Bank of Pakistan wants to improve digital payments at petrol stations in a bid to move towards a cashless economy. As the country shifts more and more towards digital payments across different sectors like restaurants, eCommerce, and more, the State Bank wants to shift petrol pump payments to digital as well. In a bid to boost this facility, it has directed all banks, payment service providers, and fuel stations to make digital payments more viable by capping the fees charged between banks and merchants.
As per State Bank’s latest circular, the Merchant Discount Rate (MDR) for card-present fuel transactions is capped at Rs. 1.00 per litre, while the Interchange Reimbursement Fee (IRF) is capped at Rs. 0.20 per litre. The Merchant Discount Rate is the fee the station pays to the payment provider when a customer uses a card, while the IRF is the interbank fee that is part of the card payment ecosystem. The circular also directs banks and payment service providers to continue expanding Raast QR payment acceptance at fuel stations alongside card payments, not just in major cities, but also in rural areas.
The new arrangements will remain in place until January 31, 2027. By lowering payment processing costs, the State Bank hopes to encourage more fuel stations to accept digital payments. While in major cities, digital payments are fairly common because of improved banking systems, better internet, and improved infrastructure, rural areas still rely mostly on physical cash because not only does the majority of the population lack digital bank accounts, but the internet and banking infrastructure are not very effective as well.
Lower processing fees reduce one of the biggest barriers for fuel stations that already accept digital payments or are considering expanding their digital payment options. Both banks and payment providers charge their own separate fee on every digital transaction, and most merchants see this as a high expense and prefer sticking to physical currency.
In other petroleum news, the Government of Pakistan reduced both petrol and diesel prices for August 4, 2026.
