Published: Mon, January 09, 2017
Finance | By Kristine Clayton

Dealers defer cardbandi at petrol pumps

After government stepped in, Petrol Pump Association across India said they will accept credit or debit cards, differing to their earlier decision after banks announced 1 per cent fee on these transactions.

All India Petroleum Dealers Association, president Ajay Bansal said that HDFC and Axis banks had demanded up to 1 per cent Merchant Discount Rate.

The petrol dealers' move comes at a time when the government is trying to encourage non-cash transactions and have even announced a 0.75% cashback offer on purchase of petrol using cards.

The threat of petrol pump owners to reject card payments would have been an embarrassment for the Modi government which has been tom tomming increase in cashless transactions as a major achievement of demonetisation.

On the other side, ICICI bank spokesperson said, "We are not charging any transaction fee on card payment from tomorrow". "Hence we have decided not to accept credit or debit cards as a payment option". "If banks start charging one per cent transaction fee from us, the remaining 2.6 per cent commission is hardly sufficient to cover staff salaries, power and water bills, maintenance and other expenses", he said. "AIPDA also has chose to defer the agitation till January 13", said Ajay Bansal, President, All India Petroleum Dealers Association (AIPDA). "This will lead to financial losses for the dealers", said Bansal in a Press statement. "To compound maters further these credit card machine issuers are delaying settlements and not settling the entire dues as per our settlements".

Bansal said that hey could not bear the additional charges levied by the banks. There are disputes about purchases being returned or not delivered. "The same will be debited to our account and net transaction value will be credited to our account".

The point-of-sale (POS) machines belonging to the banks that have introduced this scheme will not be operational. He also claimed that dealer margins are fixed by oil marketing firms per kilolitre and that they were not in a position to absorb these charges.

"Our margins are not so much that we can accept this one per cent charge on each transaction. It is not a decision only taken by us", said the official.

The banks' move would not have impacted consumers directly as no new charges will be levied on customers using debit or credit cards But it will cause inconvenience to the public as the cash crunch issue has still not been fully resolved.

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