Petrol pumps to stop accepting card payments from tomorrow

With 4 major banks deciding to charge for these from today, dealers say they have no other choice

Latest News - Following a decision by four banks to levy a charge for every sale on a credit or debit card, two petroleum dealer associations have decided not to accept any card transactions at fuel retail outlets from Monday.

The decision covers a majority of the 56,000 outlets in the country. The four banks are HDFC, Axis, ICICI and Punjab National Bank.

"We have been informed by these four banks that we will be charged one% on all credit card transactions and between 0.25% and one% on all debit card transactions from January 9. Reports suggest even State Bank of India is planning to charge the same. We feel banks are using this as an excuse to improve their bottom line through transactions at fuel stations.

Hence, we have decided not to accept any card transactions from Monday," A D Sathyanarayan, president of the Consortium of India Petroleum Dealers, told this newspaper.

Dealers say a 1% charge would mean 30% of the gross dealer margin on petrol and 40% on diesel. "Our margins will be wiped out if we accept this. We have specific mechanisms to compute the margin and these do not have any scope for credit card merchant discount rates," Sathyanarayan added.

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Save Rs 900 on petrol bill: After cash pain, some cashless gain

With the govt providing discounts in some areas to push digitisation, consumers should try and maximise benefits

The government, a month after implementation of demonetisation, has decided to give a push to digitisation. On Thursday, Finance Minister Arun Jaitley announced a slew of incentives for people willing to transact digitally.

Making digital payment on fuel purchases from petrol pumps will be cheaper by 0.75 per cent. New policies bought from customer service portals of Life Insurance Corporation (LIC) and public sector general insurance companies will attract a discount of eight per cent and 10 per cent, respectively.

There are a number of other transactions as well on which the government has decided to give discounts, provided one is willing to take the cashless route. Says Madan Sabnavis, chief economist, CARE: “The government is almost following a placatory approach with these incentives, after almost forcing people to go digital in the first month. This is a good approach, as it makes people more comfortable.”

Some petrol pumps charge two per cent on credit cards, a deterrent for many people. Now, with the government giving a discount, many will be encouraged to use cards. “However, to encourage the use of digital payment more aggressively, I believe, the government should give such incentives in many other areas,” added Sabnavis.

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