New Delhi, Sept. 9 -- Many credit card users face a familiar situation when making expensive purchases at shops: the merchant asks them to pay an additional 2% on the total bill for using a credit card.

But do customers actually have to pay this extra amount?

The answer is not as straightforward as it may appear. The Reserve Bank of India (RBI) has stated that it has not issued specific instructions regarding the levy of charges on credit card transactions. Card payments are also governed by agreements between merchants, banks, payment providers and card networks.

When a customer pays by credit card, the merchant generally incurs a fee for accepting the payment. This cost is commonly known as the Merchant Discount Rate (MDR).

The enti...