Circulars/Notifications - Payment System Department  
 PSD Circular No. 01 of 2020
January 31, 2020 

The Presidents/Chief Executive Officers,
All Banks/MFBs/PSO/PSPs & EMIs,

Dear Sir/Madam,

Improving Payment Card Acceptance Infrastructure in Pakistan


            During the past few years, there has been considerable growth in the digital payment infrastructure of the country, especially in the number of debit cards being issued by the banks to their customers. Although, the Point of Sale (POS) infrastructure has also grown during the past few years, its growth has largely remained restricted to high value merchants in big cities. Some of the key challenges being faced by the POS acquiring industry in Pakistan include high Interchange Reimbursement Fee (IRF), lower than cost Merchant Discount Rate (MDR) to onboard high value merchants and less interest by banks in offering low cost domestic payment cards to their customers.   

2. In order to address the above challenges and increase the POS card acceptance infrastructure in the country especially at retail level; in line with the objectives of National Payment System Strategy (NPSS), it has been decided to implement the following measures:  

  1. MDR for POS acquiring in Pakistan shall be within the range of 1.5% - 2.5% for both existing and new merchants. The Merchant categories mentioned at Annexure – A shall be exempt from this requirement.
  2. The Interchange Reimbursement Fee (IRF) for debit and prepaid cards issued in Pakistan used on domestic POS terminals shall be capped at 0.5%.
  3. Card issuers shall offer SBP approved Domestic Payment Scheme (DPS) Card as the default card at the time of issuance or renewal of debit cards. Accordingly card requesting customers shall be offered the following options in order of priority:
    1. Either an exclusive DPS card or a DPS card co-badged with an International Payment Scheme (IPS)
    2. An exclusive IPS card upon written request of the customer

3. The above instructions shall come into effect from April 01, 2020.

4. This circular is being issued in light of the powers conferred upon SBP under Section 3 of the PS&EFT Act 2007.

5. For any clarification, please contact Mr. Ali Saqib, Assistant Director, Payment System Department email: [email protected] Phone: 021-3245-3447.                                                                                                                                                                                                      


Yours faithfully,


(Syed Sohail Javaad)

(Please note: This Circular supersedes instructions issued through PSD Circular No. 07 of 2018)


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