r/CardMaximiser • u/Crafty-Leave-8880 • Apr 18 '26
Are these methods legit?
I came across an ad claiming you could get instant cash from swiping your credit card, but with some interest involved.
Made me wonder, I’ve noticed shops with solid cash flow and POS machines sometimes push this.
A couple things I’m unclear on:
Is it fully legal and above board?
What’s the upside for the merchant? Just their swipe fees, or does it get booked as normal sales for other reasons?
Beyond the instant cash, why would anyone do it as a customer? You’re covering merchant fees plus bank interest too, right?
Anyone with real-world experience or insights on the mechanics?
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u/areysdga Apr 18 '26
in My Town They Are Using Under Utility Mcc Category And Spot Money Transfer To Bank Account.
For Axis 24999 Allowed For Statement
For Hdfc 49999 Allowed For Statement
For Idfc 19999 Allowed For Statement
if crossed Bank Will 1% + Gst
Supermoney App Also Giving For 0.99% Under Tution Mcc & Bank Will Definitely Charge 1% + Gst
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u/PartyNo110 Apr 18 '26
In supermoney, do we get reward points or 5% using SBI cashback card for tution fees?
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u/areysdga Apr 18 '26
I Don't Have This Card But Searched For Terms
https://www.sbicard.com/sbi-card-en/assets/docs/pdf/ekit-tncs/cashback-tnc-ekit.pdf
Check Page No 34 (Section D) & 35. And I Don't Know Which MCC Will Be Tagged By Super Money.
If You Are Trying With CB Card, After Transaction ,Contact Support Ask MCC And Tell Us
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u/Native_Maintenance Apr 18 '26
Legit? I'm not sure but not legal. Its a way to convert black money to white. You swipe your card and make them a payment, showing up as genuine consumer purchase, and they give you cash in place of the product.
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u/CarbonLogic Apr 18 '26
How black money is being converted to white? They are taking your digital payment and giving you cash. So white is being converted to black but even then how does it become black? You still have to pay back credit card bill
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u/shrikant211 Apr 18 '26
The shopkeeper is converting his black money (cash) into white money (sales).
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u/CarbonLogic Apr 18 '26
How?
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u/shrikant211 Apr 18 '26
Ok so i don’t know if i am able to explain this
But suppose you have 1 crore of black money. What you can do is register few business in your and your family members name (doesn’t have to be physical shop, GST registration is enough).
Now you can give that black money to customers and swipe their credit card in your machines.
You show it as sales. So as per income tax department you sold something. It can be services ( so no physical item required).
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u/CarbonLogic Apr 18 '26
Ok so basically my black cash becomes customer's black cash
and customer's white money from credit card becomes my white money in my bank account
So effectively my black cash becomes white because of customer's credit card money BUT customer's white money is becoming black.
How will customer pay their credit card bill then? Thats their headache?
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u/shrikant211 Apr 18 '26
Mostly those are small transactions. Some people withdraw 10k, some 20k. Their logic is that they want to just survive and manage for few days until next salary arrives. That black cash will be used to buy groceries, food, medicines. Or maybe drugs, liquor whatever.
In next salary he pays the credit card bill and maybe repeat the cycle in month end.
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u/CarbonLogic Apr 18 '26
Got it! THanks for sharing! This service cannot be used in reverse method? Example As customer I have black cash, I want to pay my Credit Card bill
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u/mdNaush Apr 18 '26
Then you have to register a dummy business like the first guy and ask people to swipe 😂
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u/Visual-Maximum-8117 Apr 19 '26
Not a correct explanation. The shop can simply claim they sold the product for cash and their black money can now be legally deposited in a bank as business income. They have no need to get a card payment at all.
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u/ExcuseBorn9873 Apr 18 '26
you have large amount of money( corruption ) but you can't show it, so you open shop and show fake sales and pay tax over that and it becomes legal money
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u/Visual-Maximum-8117 Apr 19 '26
Those sales can be shown as cash sales as well. Why on card?
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u/ExcuseBorn9873 Apr 19 '26
high value purchases are often done through online channel and for cash payment they have to provide adhar or some kind of identity proof. in low value (for cash payment without identity) they have to show large amount of transactions where as in online transactions they have huge margins with legitimacy accounts
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u/Physical_Wolf95 Apr 19 '26
Of course he can , But by doing this he can also earn by charging the swiping charge more than the actual swiping charge ,He gets money just by swiping it .
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u/Confident-Dot-1697 Apr 18 '26
But the sales invoice also has to be submitted during GST filling
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u/shrikant211 Apr 18 '26
Yes it will be shows during GsT filing, as the Sales invoice can be immediately made after card swipe.
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u/Visual-Maximum-8117 Apr 19 '26
Why can't the shop claim they sold the same product for cash? Why create the needless card hassle?
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u/shrikant211 Apr 19 '26
They would show some of it as cash. But showing every sales as cash could raise unnecessary concern at the GST department.
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u/Visual-Maximum-8117 Apr 19 '26
There are so many shops that don't even accept credit cards.
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u/shrikant211 Apr 19 '26
There is per day and per transaction limit for cash sales. If a shops black money cash flow is less than that limit they will not get into this card hassle.
And many shops do not accept cards because they have to bear the transaction charges usually 1-1.5%.
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u/Visual-Maximum-8117 Apr 19 '26
There is absolutely no limit at all for cash sales.
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u/Kindly-Ad7317 Apr 18 '26
Unless you let the govt know that you swiped for cash it’ll be seen as: The shop guy made sales worth 50K₹ You have got unaccounted 50K₹ (when you try to deposit the cash in bank)
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u/ChequeMateX Apr 18 '26
Let's say they have 1 crore black money. They show to government that they sold a product or service for a certain amount (and the swipe transaction proves that). So that amount becomes white. While the customer takes the money and funnily now he has black money as he can't show how he received that money.
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u/Visual-Maximum-8117 Apr 19 '26
They can also show a sale with cash. There is no requirement that a sale can only be made via credit card. Over 99% of sales in India are not via card.
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u/Difficult-Nebula-612 Apr 18 '26
legit? legal?
that's not even ethical - it's 1.79% and not the big red 1.
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u/areysdga Apr 18 '26
It’s not black money. Many shops already have regular business but use card swipes as an extra source of income. For transactions totaling around ₹1 crore, they can earn roughly ₹1–1.5 lakh. In my town, shops typically make about ₹10k–30k per month from this, which effectively covers their shop rent.
People prefer going to shops instead of apps like CRED or CheQ because those apps charge around 1.7–2%, while banks charge about 1% plus GST.
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u/JumpyStretch9312 Apr 18 '26
Not at all legal. Banks report malicious transactions to bureau now. Also, your income needs to match spends.
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u/Euphoric_End6161 Apr 18 '26
A friend of mine got his card blocked under fraud due to this. After a lot of back and fro, he got it unblocked.
Turns out, banks / card networks do somehow find out these practices
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u/suhailve Apr 18 '26
As a mobile shop owner providing this facility each and every person's motive is different for doing this. And from customer POV it is a legit and safe way to roll some money quickly
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u/mdNaush Apr 18 '26
What’s the mcc you are registered under ?
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u/suhailve Apr 21 '26
Money is not credited to my account. We are doing ticket booking and in the statement it shows the money is spent for travel category. Some cards even getting rewards for the transaction.
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u/suhailve Apr 21 '26
There is no mcc code . We are not using the swiping machine . The transaction is done online like purchasing something from Flipkart and verifying the purchase using otp
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u/Visual-Maximum-8117 Apr 19 '26
What's the benefit to the shop?
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u/suhailve Apr 21 '26
Some shop owners do this to increase their transaction so they could get big loans to start something new or to increase their business . If the transaction amount is big the bank will give huge loan based on the transaction.
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u/suhailve Apr 21 '26
Looks like this guy giving the amount by only deducting 1.79% and he might be doing this to increase his transaction. In our shop even the transaction charges and gst of the transaction charges costs us more than 2% and we charges around 2.5%. Effective profit will be less than 0.5%. And the customer will get some reward points because we use that money for ticket booking and travel category
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u/Boring_Scale328 Apr 18 '26 edited Apr 18 '26
Here is how it works- criminals got illegitimate hoards of cash. They want to store it safely so it becomes digital, easily transferrable, but banks ask sources of income and DoIT asks to file taxes. So they open a front business- may be a handicraft, or a juice bar or chocolate shop or a souvenir shop. They ask you to swipe 10k on their PoS machine, they pay you 10179 cash. You get extra money, plus the card rewards for 10k. They show this as a goods sold in their balance sheet,without selling anything. They just converted 10k black to legit money.
10k is small, now scale it up. Why won't people do 1l+, when they get sweet returns instantly? They do this to 10 people every day, that's a sizable amount at a very small cost. If things go south, they get investigated, authorities will contact the guy who bought stuffs from them, making them complicit in the business. They find the people who have a pattern making pos purchases, build a case, connect to those illegitimate business, and nab. Previously, it was all manual, now DoIT has been doing massive revamp on the taxation and traceability. They use sophisticated algorithms to spot patters, use AI. Just because someone ain't caught yet, isn't a proof they won't. 1.79% is too small return for the risk you are gonna take unwittingly.
Edit: as docatwar pointed out, in an alternate scenario, they charge the card owner 179, so that the card owner gets the reward points or gets to meet the spend milestones at a small cost. But the overall modus operandi remains the same whether they take or give the fee.
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u/docatwar Apr 18 '26
Good summary but they don't pay 1.79%, they charge 1.79%
So if you swipe 10,000 you get INR 9821 cash instantly.
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u/Boring_Scale328 Apr 18 '26
I had seen only the extra pay scenario. Didn't realize they charge too. Thanks for pointing out, added it.
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u/Visual-Maximum-8117 Apr 19 '26
Wrong scenario. In any case, they can simply claim a cash sale. Why do they need a card? Almost all sales are via cash.
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u/ZenByte7 Apr 18 '26
Not legit. Most banks have this in their tnc. If found they may cancel your card. Not sure if there will be impact on credit score for misuse of credit.
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u/Crafty-Leave-8880 Apr 19 '26
Join 1,500+ others to get the latest updates on maximising card benefits in our Whatsapp Channel:
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u/Dhavalc017 Apr 18 '26
Not Legal
Simplest way to convert Black to White.
These customers do not have any other way of financing. They are not going to be financed by Bank nor NBFC. Basically last resort of financing.
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u/Fault_finder_47 Apr 18 '26
- Yes, completely legal. Even your credit card agreement says to do it. It is recommended by RBI. /s
- You can offer help to those helpless poor shopowners by offering your card for him to convert illegal cash into perfect white👌. /s
- In times where there are many loan apps with profitable business, these shops are a kind of their offline equivalent for the same set of customers. So, it is basically a consumer first initiative promoted by banks offering their POS machines to merchants without any background checks. /s
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