In a major relief to the public still reeling under a post-demonetisation cash crisis, banks on Sunday night deferred their decision to charge transaction fee of 1 per cent on payments through cards at petrol pumps till January 13. Following the decision by bankers, petroleum dealers too deferred the decision not to accept credit and debit cards for fuel purchase till January 13.
Earlier, the All India Petrol Pump Association had announced they would not accept payments through debit and credit cards to protest the decision by banks to impose 1 per cent levy on every sale from Sunday midnight.
After Bengaluru and Tamil Naidu, Delhi’s petrol pump owners association had on Sunday declared that petrol pumps in Delhi would not accept digital payments through cards.
The late night decision by banks to defer the fee came after pressure from the Government and hectic discussions with bankers, dealers and representatives of State-run fuel retailers.
Earlier, Ajay Bansal, president, All India Petroleum Dealers Association (AIPDA), had written a letter to Union Finance Minister Arun Jaitley about the Merchant Discount Rate (MDR) of banks.
“We have been informed by HDFC and other banks that they will be charging 1 per cent on all credit card transactions and between 0.25per cent and 1per cent on all debit card transactions from January 9. The same will be debited to petroleum dealers account and net transaction value will be credited to our account,” Bansal said.
“They have quoted RBI circular PSS.CO.PD.No.1515/
02.14.003/2016-17 dated December 16, 2016 as the root cause of this debit. Unfortunately, neither that circular nor the circular referred to by the above said circular have any reference to credit card charges or for not passing the same to the customers,” said Bansal. “We feel that banks are using this as an excuse to improve their bottomline through transactions at fuel stations,” he had said.
“Since our margins are fixed on a per kilolitre (Kl) basis and do not have any scope to absorb these charges any further, we oppose the credit card MDR. This will lead to financial losses for the dealers,” said Bansal in a Press statement.
“To compound matters further these credit card machine issuers are delaying settlements and not settling the entire dues as per our settlements. There are disputes about purchases being returned or not delivered. The reconciliation of swipes to amount
being credit to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community,”
he added.
According to Mumbai Petrol Dealers’ Association, most of the petrol pumps are using HDFC point of sale (POS) machines. Earlier last month, the Government had announced 0.75 per cent discount on purchase of fuel through card.
Protesting the move, Tamil Nadu Petroleum Dealers Association president KP Murali had said their margins were fixed on a per Kl basis and that they did not have scope to absorb these charges.
“All POS machine issuing banks who are not charging the same and are willing to adhere to existing commercial arrangements should correspond with us to let us inform our members to continue with accepting cards on their machines, he added.
To promote cash-less transactions, the Government had waived the Merchant Discount Rate (MDR) on fuel purchase post demonetisation for consumers. But after the expiry of the 50-day window, the banks have decided to levy MDR on petrol pump owners.
“Petrol pump dealers across the country, including those in Gujarat, will stop accepting money through debit and credit cards from Monday to protest an RBI circular asking banks to debit 1 per cent from petrol pump dealers account on payments through cards from January 9,” said Gujarat State Petroleum Dealers Association president Arvind Thakkar.
Thakkar is also a senior vice president of the All India Petroleum Dealers Association. “By accepting money through debit and credit cards, we are providing service to our customers, and imposing 1 per cent charge for the service is not reasonable. Therefore, we will not accept money through cards until this is rolled back,” he said.