SBP digital payments petrol pumps reforms have arrived, and they could finally break Pakistan’s most stubborn cash habit.
The State Bank of Pakistan has capped card charges and set a hard deadline for QR-based payments at fuel stations nationwide, a sector that has resisted going digital for years despite handling millions of daily transactions.
What the New SBP Circular Means for Fuel Retailers
The central bank issued a PSP&OD circular directing all banks, microfinance banks, electronic money institutions, and payment system operators to apply new, lower transaction charges at fuel stations. The order takes immediate effect and stays in place until January 31, 2027.
This isn’t SBP first attempt at the problem. The circular builds on instructions first issued in 2023, but this time the central bank has switched from percentage-based charges to a flat, per-litre model — a structural change meant to make digital acceptance commercially viable for dealers who have long complained about costs eating into thin margins.
Old vs New: How Card Payment Charges Have Changed
The core of the reform is a redesigned fee ceiling. Instead of charging a percentage of each transaction — which penalises high-value fuel purchases — the new structure fixes costs per litre sold.
- Merchant Discount Rate (MDR): capped at Rs1 per litre for all card-present fuel transactions
- Interchange Reimbursement Fee (IRF): limited to Rs0.20 per litre
- Applicability: covers all payment cards issued in Pakistan, effective immediately
- Review timeline: SBP will reassess the policy near the end of January 2027
| Charge Type | Previous Structure | New Structure (2026) |
|---|---|---|
| MDR | Percentage-based, sector-specific negotiation | Fixed at Rs1/litre |
| IRF | Variable, higher for card transactions | Capped at Rs0.20/litre |
| Raast QR | Optional, inconsistently deployed | Mandatory by Jan 31, 2027 |
Why Petrol Pumps Have Resisted Digital Payments
Fuel retail has trailed nearly every other retail category in Pakistan’s digital payments shift. Dealers have repeatedly argued that percentage-based MDR charges made card acceptance unprofitable given fuel’s low per-litre margins.
According to SBP data, Pakistan already has roughly 248,000 POS terminals, 2.5 million QR-enabled merchants, and 68.3 million payment cards in circulation. Yet cash remains dominant at most fuel stations, particularly outside major cities — infrastructure alone hasn’t solved adoption.
Raast QR Mandate and the January 2027 Deadline
Alongside the fee caps, SBP has made Raast QR acceptance compulsory for every petrol pump in the country. The instant payment system, developed with World Bank support and launched in 2021, allows account-to-account transfers without card infrastructure.
READ MORE: Pakistan Cuts Visa Mastercard Reliance With PayPak
Regulated entities have been directed to actively onboard fuel station merchants and promote QR usage during the transition window. Stations that fail to comply by the January 2027 deadline could face regulatory action, giving the mandate real enforcement weight rather than being a mere recommendation.
Industry Reaction: Analysts and Dealers Weigh In
Reaction from banking and industry voices has been broadly supportive, though not uncritical. Financial analyst Ibrahim Amin said reducing the fees would positively impact fuel station sales, calling it “a win-win situation for all stakeholders.” He added that dealers should pass savings on to customers while strengthening transaction security.
Not everyone thinks the caps go far enough. All Pakistan Petroleum Dealers Association spokesperson Hassan Shah argued the revised Rs1-per-litre MDR cap “remains higher than economically justified,” pointing out that dealers already earn thin margins after tax deductions.
IT expert Dr Noman Said separately called for QR facilities to expand beyond major cities into tier-2 and tier-3 towns, while former FPCCI secretary general Shahid Anwar stressed that cutting fees alone won’t drive adoption — active promotion of Raast QR matters just as much.
What Changes for Consumers and Fuel Station Owners
For everyday motorists, the reform should mean more petrol pumps actually accepting cards and QR payments without surcharges or refusals — a common complaint in cities and small towns alike.
For station owners, the flat per-litre fee structure removes some of the cost unpredictability that came with percentage-based charges. Key practical shifts include:
- Lower, predictable transaction costs regardless of fuel price fluctuations
- A compliance clock ticking toward January 2027 for QR infrastructure
- Pressure on banks and fintechs to actively onboard merchants rather than wait for demand
- Potential regulatory consequences for stations that miss the deadline
Pakistan’s Broader Digital Payments Drive
This move sits within a longer SBP campaign to formalise Pakistan’s cash-heavy economy. Government subsidies for Raast QR transactions, instant payment infrastructure, and repeated MDR interventions since 2020 all point to a central bank determined to shift retail payments away from cash — fuel stations were simply the toughest holdout.
This latest push finally works will depend on execution: how quickly banks onboard stations, whether dealers pass on savings, and whether QR infrastructure genuinely reaches beyond Pakistan’s largest cities.
