The State Bank of India (SBI) has said it will charge a processing fee as well as tax on all EMI transactions done through its credit cards. In a latest move, the SBI Cards & Payment Services Private Limited (SBICPSL) announced it will charge a processing fee of Rs 99 and levy taxes on it. The new rule will be applicable from December 1, 2021 which is only 17 days away from today, that is Saturday, November 13. The lender will charge this processing fee on all equated monthly instalment (EMI) transactions made at retail outlets as well as e-commerce websites such as Amazon, Flipkart and Myntra.
The notification was sent to the SBI credit card holders on Friday, November 12 via an e-mail. “Dear Cardholder, We would like to inform you that with effect from 01 Dec 2021, Processing Fee of Rs. 99 + applicable taxes will be levied on all Merchant EMI transactions done at Merchant outlet/website/app. We thank you for your continued patronage. Please click here to know more about Merchant EMI Processing Fee,” the mail from SBICPSL read on the day. Cardholders of all SBI credit cards received this message. These rates will apply over and above the interest charges to convert one’s purchases into monthly payments, a service used by lakhs of citizens at present.
At times, many merchants give discounts on EMI transactions by paying the interest to banks, which then appear as ‘zero interest’ to the customers who hae purchased something. Even in this case, from December 1, SBI credit card holders will have to pay the processing fee of Rs 99, as per the new rules set to be implemented by the state-owned lender.
The processing fee of Rs 99 will be charged on only those transactions which have been successfully converted into equated monthly installments or EMI transactions, according to reports. On the other hand, the processing fee will be reversed if the EMI transaction fails or is cancelled. However, this will not be reversed in case there is a pre-closure of the EMI.
The applicability of the newly announced processing fee on EMI transactions will be intimated by the company to cardholders through charge slips if they shop at any retail outlet. For online transactions made through EMI, it will intimate the processing fee on the payments page of the merchant. For transactions made before December 1, but whose EMI will start after the date, the bank will not charge any processing fee as old rules will be applicable. For transactions converted into merchant EMI, the company will not apply any reward points that may have been there.
“These processing charges from SBICPSL are as per industry standards. Other leading private banks have been charging these fees for a long time,” a retail banker, on the condition of anonymity, has told Moneycontrol.
But how does this new rule even work? Suppose you buy a mobile phone using your SBI credit card, from an e-commerce website, for example Amazon, under the bank’s EMI scheme. Then SBICPSL will charge you an additional fee of Rs 99 to process the transaction. It will also charge you added taxes. This additional amount will reflect on your monthly statement of your credit card along with the EMI amount for that product.
The new move, according to reports, is likely to affect ‘Buy Now, Pay Later’ schemes as they may become more expensive on the buyers. These options are usually provided by e-commerce websites.
Read all the Latest Business News here
Comments
0 comment