All India Petroleum Dealers Association have declared earlier in the day that petrol pumps across the country will not accept credit and debit card payments starting from 9th January (today), owing to the banks levying up to 1% charge as transaction cost on every sale. Now, they have deferred the decision of not accepting the payments through cards till January 13th.
This move comes after a late night-intervention by the government which, sources said, assured that the contentious merchant discount rate or MDR fee won’t be applied till that day. While government is pushing the cashless payments following the scrapping of old 500 and 1000 bank notes, the announcement from the petrol pumps could have hit people hard.
Banks started levying service charge on debit card transactions from January 1, 2017 which was discharged until December 31, 2016. While there are a few exception on levying debit card transaction cost at certain places, banks informed petrol pumps that they could impose tax on every sale made via debit or credit card. It was only certain private banks were imposing transaction fee up to 1% on debit card transactions.
We want to help the government in the digital and cashless drive. Our margins are already less. We want them to compensate us,” Ajay Bansal, chief of All-India Petroleum Dealers’ Association, said.
The All India Petroleum Dealers’ Association has also written to Union Finance Minister Arun Jaitley, saying “HDFC and other banks” were levying the MDR charge and since there has been no word of passing the charge to consumers, the dealers will sustain a loss.
The pumps have been notified that 1% charge will be levied on all credit card transactions and between 0.25% and 1% on all debit card transactions from January 9, 2017. The banks have quoted a circular issued by the Reserve Bank on December 16 as the reason for the extra charges, the letter said. It went on to add, “Banks are using this as an excuse to improve their bottom line through transactions at fuel stations.”
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