India: Petrol pumps won't accept card payments from Monday in protest against transaction fees
All India Petroleum Dealers Association (AIPDA) president Ajay Bansal told the media that all pump owners are firm in their decision to withdraw card swipe machines from intervening midnight of Sunday and Monday. Photograph: (Getty)
In a move that is bound to add some hurdles in commuting activities, the All India Petroleum Dealers Association has announced that petrol bunks across the country will stop accepting debit and credit cards effective from Sunday midnight.
The announcement, which has come in the wake of banks levying a 1% transaction fee on card payments across all petrol pumps, will cause inconvenience to customers already experiencing cash shortages following the government's demonetisation move.
All India Petroleum Dealers Association (AIPDA) president Ajay Bansal told the media that all pump owners are firm in their decision to withdraw card swipe machines from intervening midnight of Sunday and Monday.
“We are operating on a very thin margin. We cannot afford this deduction. Hence we have no other go than stop accepting debit and credit cards,” Bansal said. When pointed that the dealers are going against government directions, Bansal said they have no other option. Bansal said the decision to stop accepting debit and credit cards had been conveyed to petroleum ministry and finance ministry officials, he said.
ICICI Bank, HDFC Bank and Axis Bank sent notices to dealers on Saturday night to inform them about the surcharge. Following this, on Sunday, the Tamil Nadu Petroleum Dealers Association said it has received an intimation from banks about the 1% charge and has announced that it will not accept plastic money in protest of this move.
"We have suddenly received intimation from the bankers, reneging on their existing agreements with us, and for having decided to levy a Merchant Discount Rate (MDR) of 1% plus taxes on all transactions done at our outlets," KP Murali, President of the Association, said. This move was a 'unilateral' one by bankers who had installed card swipe machines at the fuel outlets, he added.
Protesting the move, Murali said their margins were fixed on a per kilolitre (KL) basis and that they did not have scope to absorb these charges. "We have specific mechanisms to compute the margin and these do not have any scope for Credit/Debit card MDR. This will lead to financial losses for the dealers," he said. Further, bankers were also "delaying payments" and not settling the entire dues, he alleged.
"The reconciliation of swipes to amount being credited to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community," he said in a statement. "We will not be able to withstand the financial losses generated by these transactions and have decided to stop accepting Credit/Debit Cards from January 9, 2017," he added. Hyder Ali, the association General Secretary, asked, "How can we do our business with losses?" Murali said the dealers have requested Oil Marketing Companies and various authorities to intervene and address the situation.
Meanwhile, the announcement prompted the city motorists to rush to fuel outlets to fill their vehicle tanks by making payments through Debit and credit cards. Many motorists felt this will add to their difficulties with few ATMs dispensing cash due to demonetisation.