SBP Unveils Incentives for Digital Payments at Petrol Pumps

The State Bank of Pakistan (SBP) has introduced a new framework to promote digital payments at fuel stations by capping transaction charges on card payments and directing banks to expand Raast QR acceptance across petrol pumps nationwide.

Under the new arrangements, the Merchant Discount Rate (MDR) for debit and credit card transactions at fuel stations will be capped at Rs. 1 per litre. At the same time, the Interchange Reimbursement Fee (IRF) will be limited to Rs. 0.20 per litre for purchases of fuel and related products.

The central bank has also instructed commercial banks to actively work with fuel station operators to enable Raast QR-based payment acceptance, allowing customers to pay digitally using Pakistan's instant payment system.

According to the SBP, the special pricing arrangements will remain in effect until January 31, 2027, and will apply to all payment cards issued in Pakistan.

The move is aimed at accelerating digital payments in one of Pakistan's most cash-intensive sectors. More than 15,000 fuel stations operate across the country, although point-of-sale (POS) terminals are currently concentrated in major urban areas, limiting card acceptance in many locations.

Digital payments analyst Abdus Samad Khan said the initiative will encourage fuel stations to install more POS terminals and QR payment facilities, improving convenience for consumers while reducing cash handling and associated security costs across the petroleum sector.

The Pakistan Petroleum Dealers Association (PPDA) has welcomed a State Bank of Pakistan decision to lower bank charges on card transactions at fuel stations, calling it a significant step towards promoting digital payments and financial inclusion across the country.

Petroleum dealers say fuel stations currently pay roughly 0.8 percent in bank charges on card payments, which translates to about Rs. 2.40 per litre. These steep fees, they said, have long discouraged both petrol pumps and banks from expanding card payment infrastructure.

PPDA Chairman Malik Khuda Baksh said the SBP's latest intervention would encourage wider adoption of digital payments at filling stations by bringing down transaction costs. "Although our demand was for zero percent charges, we appreciate this initiative and believe that, in consultation with the PPDA, the charges will be reduced further in the future," he said.

The association's demand for a complete waiver was formally raised during a meeting with officials from the Oil and Gas Regulatory Authority (Ogra) and the government in the last week of July. Federal Minister for Petroleum Bilal Azhar Kayani had assured the association at the time that the matter would be taken up, and the PPDA chairman noted that the minister has now honoured that commitment.

According to the latest SBP data, 68.3 million payment cards are currently in circulation in Pakistan, with card usage continuing to rise, particularly in the retail sector.

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