Temporary relief? Petrol pumps will be accepting credit/debit cards for now

Petrol pump owners have reversed their decision after they threatened to stop accepting credit and debit card payments,. Earlier, the owners of fuel stations had threatened to stop accepting cards as banks had decided to levy transaction fee of upto 1%. However, after the Centre stepped in, pump owners have now decided to defer the decision by four to five days.

According to the sources, the government has assured the dealers that the merchant discount rate or MDR fee won't be applied till January 13. The intervention came after the petroleum dealers' association had written to Union finance minister Arun Jaitley, informing him about the sudden decision by the banks to levy the transaction charge and their resolution to refuse card payments.

Fuel pump owners had decided to discontinue accepting plastic money from Monday to protest against HDFC Bank’s merchant discount rate (MDR) levy.

“HDFC Bank has made the first move to charge MDR for every transaction made using plastic money. About 75 per cent of petroleum dealers have HDFC Bank’s Point of Sale (PoS) terminals. HDFC Bank has made the first move to charge MDR for every transaction made using plastic money,” Ravi Shinde, president of Petrol Dealers’ Association, told ET.

The decision by fuel dealers could have hit the consumers as well the government's efforts to push cashless transactions amid a nationwide cash shortage following the scrapping of Rs. 500 and 1,000 rupee notes.

"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, told ET.

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."