New Delhi:
In a move that spells trouble for credit card holders, Yes Bank and IDFC First Bank have announced the imposition of surcharges on payments of utility bills, effective May 1.
This decision is set to affect payments for telecommunications, electricity, gas, water, internet services,
and cable services bills through credit cards issued by both banks.
Surcharge Details:
Yes Bank will enforce a 1% surcharge along with GST on bill payments exceeding Rs 15,000 through their credit cards.
However, no surcharge will be applied to payments made through the Yes Bank Private Credit Card.
Conversely, IDFC First Bank will levy a 1% surcharge and 18% GST on utility bill payments surpassing Rs 20,000,
with exemptions for certain card types like the FIRST Private Credit Card and specific LIC credit cards.
Implications for Customers:
These surcharge regulations will be enforced in every statement cycle,
posing financial implications for customers who frequently utilize credit cards for utility bill payments.
Industry Analysis:
The move comes amidst a trend of banks tightening restrictions and focusing on increasing revenue streams from credit card transactions.
According to Sumant Mandal, founder of Technofino, utility bill payments represent a low-margin business category for banks, prompting these measures.
Banks also express concerns over potential misuse of their cards for utility payments.
