Westside charges ₹49 for all credit card transactions — Netizens ask if it is legal? Experts weigh in | Legality
Retail giant Westside has recently sparked an uproar among shoppers for charging a flat “convenience fee” of ₹49 on all credit card transactions.
“A convenience fee of ₹49/- shall be charged on all credit card transactions in-store,” the Westside in-store policy notice read. In a response to a concerned customer, the store said: “You can avoid this charge anytime by using UPI, debit cards, or cash.”
This has triggered a massive backlash online, with netizens calling it a “cheap tactic” and questioning the fairness of the controversial charges.
Journalist Sucheta Dalal also took to X, questioning the legality of Westside's move: “Will @fssai @DeptConsumerAff look at this? Why should stores be allowed to levy a convenience fee for credit card transactions?? Because they can? Because you are quiet about platform charges?”
When it comes to the Merchant Discount Rate (MDR)—the cost merchants pay banks to process card transactions—the regulatory lines blur between debit and credit cards, legal experts said.
Tushar Kumar, Advocate at the Supreme Court of India, told LiveMint that while the Reserve Bank of India (RBI) expressly prohibits merchants from passing on the MDR to customers for debit-card transactions, there is “no corresponding blanket prohibition” for credit cards.
Nihas Basheer, Partner at Wadia Ghandy & Co., explained that this distinction exists primarily because debit cards utilise a customer's “own funds while credit card usage is more of a loan”.
However, the absence of an RBI ban does not give retailers a free pass. Alay Razvi, Managing Partner at Accord Juris, pointed out that while a flat ₹49 fee isn't “automatically unlawful,” it becomes legally vulnerable if it was “imposed after the customer had committed to the purchase” or “misleadingly described”.
Transparency and prior disclosure are decisive factors. Rahul Hingmire, Managing Partner at Vis Legis Law Practice, warned that such fees might breach the merchant’s acquiring bank agreements, noting that specific bank terms often “prohibit surcharges on cardholders”.
Retailers often label these charges as “convenience fees,” but legal experts argued that nomenclature doesn't change the nature of the fee.
Basheer clarified that a true convenience fee applies to a payment method “not ordinarily used by the merchant,” whereas the MDR is standard overhead for commonly accepted payment methods.
Passing the MDR directly to the customer is essentially a "payment surcharge," according to Hingmire. He stressed that a retailer who routinely accepts credit cards cannot validate a prohibited charge “merely by describing ₹49 as a ‘convenience fee’.”
“Its substance, applicable payment terms and disclosure must be examined,” Hingmire said. “Neither a flat amount nor advance disclosure can validate an otherwise prohibited charge.”
Razvi emphasised that a genuine convenience fee must be a “separately identifiable charge for an optional service” and not just a disguised attempt to recover card-processing costs. “MDR is the fee charged by the acquiring bank to the merchant for accepting card payments; it is a merchant-side cost. A direct pass-through occurs when the merchant labels its card-acquisition cost as a customer-facing convenience fee.”
Kumar summarised that the distinction is “one of substance rather than nomenclature,” meaning that a convenience fee is levied “for an identifiable additional facility or service extended to the consumer”,
Therefore, Kumar said, if the fee is levied solely because a customer uses a credit card “without any corresponding independent service,” it bears all the characteristics of a legally questionable payment-method surcharge “irrespective of its description”.
If a customer is hit with this charge at the billing counter, the legal experts advise customers to object immediately.
“Customers should immediately request removal of the charge and an explanation of its basis,” Hingmire suggested, adding that the “itemised bill, payment receipt and displayed fee notice” must be preserved to establish a formal complaint with the card issuer or acquiring bank.
“Customers may also approach the National Consumer Helpline on 1915. The practical course is to document, object and escalate; a bank complaint does not automatically guarantee reversal,” Hingmire said.
Razvi added that if the fee wasn't disclosed prior to billing, customers can “refuse to pay it or seek its reversal,” and potentially escalate the matter to “the merchant, acquiring bank or card network, and, where a regulated payment participant is involved, approach the RBI Ombudsman”.
Kumar noted that imposing an undisclosed charge at the point of payment could amount to a “materially misleading representation of the transaction price,” which attracts scrutiny under the Consumer Protection Act, 2019.
“The aggrieved customer may approach the National Consumer Helpline and, where warranted, institute proceedings before the competent Consumer Disputes Redressal Commission,” Kumar said.
Additionally, Basheer pointed out that if a customer is charged such a fee on a debit card, they have the right to demand its removal, as passing MDR on debit cards strictly violates “the terms of the agreement between them and the acquiring banks.”
For consumers wondering if a ₹49 charge is too small to litigate, legal experts affirmed that the amount does not bar a valid complaint under the Consumer Protection Act, 2019.
According to Hingmire, success in a consumer commission depends on proving an “unfair trade practice, misleading disclosure or overcharging”.
“Section 2(6)(iv) of the Consumer Protection Act, 2019 covers charges exceeding applicable legally prescribed, displayed or agreed prices,” he said. “The consumer should seek a refund with supporting records and, if unresolved, consider proceedings.”
Razvi emphasised that the strongest claim isn't simply that the fee was charged, but rather that it was “undisclosed, imposed after billing, misleadingly labelled, or a disguised pass-through.”
“The claim would rest on deficiency in service and unfair trade practice,” he said. “If the charge was clearly disclosed in advance and represented a genuine, separately identifiable service, a consumer court may be less likely to interfere.”
Consumers can base their proceedings on specific sections of the Consumer Protection Act concerning the “right to price transparency, deficiency in service and unfair trade practices,” Kumar detailed.
If the merchant represented a specific price but subsequently sought to increase it through an “undisclosed ancillary levy,” the commission could order a refund, along with compensation and litigation costs.
Basheer concluded that failing to disclose the charge transparently "would necessarily follow" as an unfair trade practice, opening the door to legal recourse.
Arshdeep Kaur is a Senior Content Producer at Mint, where she reports and edits across national and international politics, business and culture‑adjacent trending stories for digital audience. With five years in the newsroom, she strives to balance the speed and rigor of fast‑moving news cycles and longer, context‑rich explainers. <br><br> Before joining LiveMint, Arshdeep served as a Senior Sub‑Editor at Business Standard and earlier as a Sub‑Editor at Asian News International (ANI). Her experience spans live news flows, enterprise features, and multi‑platform packaging. <br><br> At Mint, she regularly writes explainers, quick takes, and visuals‑led stories that are optimized for search and social, while maintaining the publication’s standards for accuracy and clarity. She collaborates closely with editors and the audience team to frame angles that resonate with readers in India and abroad, and to translate complex developments into accessible, high‑impact journalism. <br><br> Arshdeep's academic training underpins her interest towards policy and markets. She earned an MA in Economics from Panjab University and holds a Post‑Graduate Diploma in Broadcast Journalism from the India Today Media Institute (ITMI). This blend of economics and broadcast storytelling informs her coverage of public policy, elections, macro themes, and the consumer‑internet zeitgeist. <br><br> Arshdeep is based in New Delhi, where she tracks breaking developments and longer‑horizon storylines that shape public discourse.
Get Latest real-time updates
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
HomeMoneyPersonal FinanceWestside charges ₹49 for all credit card transactions — Netizens ask if it is legal? Experts weigh in | Legality
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.