Banks levy fee on cash payment of card outstandings

Making cash payments at bank counters to settle your credit card dues is getting expensive.

Credit card issuers led by ICICI Bank and HDFC Bank have started levying a fee on such payments. Other banks such as HSBC are likely to jump on the bandwagon soon. Another foreign player, Standard Chartered Bank too has started imposing a transaction fee on customers who make cash payments against credit card outstandings.

According to estimates, 25-30 per cent of the 27 million credit card users make cash payments.

While banks are shifting to this new regime, most of them are not clearly mentioning this new levy, neither in the fine print nor on their websites.

ICICI Bank, which is the largest credit card issuer in India with a customer base of around 9 million, charges Rs 100 each time a customer settles his credit card bills in cash at a branch.

Similarly, HDFC Bank charges Rs 50 each time a customer makes a cash payment for credit card dues.

ICICI Bank sources said the charges are levied as part of services offered at the branch.

“We have kept multiple options for our customers to pay their card dues. We urge our customers to repay their debt through other channels like online payment or cheque. If a customer still prefers to walk into a branch to pay bills, s/he needs to bear a transaction charge as the cost of serving a customer at the branch is higher,” said an executive at another private bank.

Standard Chartered Bank charges Rs 99 for accepting cash against card dues. “Credit card customers normally do not come to the branch. If they intend to use this payment route, they need to pay branch transaction charges as we provide them with other services too at the branch. However, we may consider revising these charges going forward,” said a bank executive.

Other major credit card issuers such as Axis Bank, Citibank and HSBC do not charge their customers for paying credit card bills in cash so far.

“At present, we do not charge customers for settling their card dues in cash. But we are not ruling out the possibility of adopting the policy of charging card-holders for accepting cash. There is a lot of manual work involved in branch-level transactions, and customers need to pay for these services. The charges could be fixed in the range of Rs 50-150,” said an executive at HSBC, which has about 2.6 million credit card holders.

“We are committed to providing our customers all possible avenues to make their payments conveniently,” said a Citibank executive.

“Our credit card base is not significant enough at present to levy charges for clearing cash handling costs at branches,” said an Axis Bank executive.

Quote:

We’ve kept multiple options for our customers to pay their card dues. We urge them to repay their debt through other channels… If a customer still prefers to walk into a branch to pay bills, s/he needs to bear a transaction charge as the cost of serving a customer at the branch is higher