[Update] Just hours after the announcement, petrol pumps on Sunday night deferred their decision of not accepting credit and debit cards payments for fuel purchase till January 13, according to PTI.
Ajay Bansal, President, All India Petroleum Dealers Association (AIPDA), told PTI that after receiving official communication from oil marketing companies that transaction fees have been deferred till January 13, 2016, AIPDA has also planned to defer the agitation till January 13.
On Sunday, news came out that effective midnight, petrol bunks across the country will stop accepting debit and credit card payments.
The move is a step against the levying of the 1 percent transaction fee (merchant discount rate) on card payments at petrol pumps, according to Ajay Bansal, President of the All India Petroleum Dealers Association (AIPDA), as reported by The Hindu.
It has been reported that banks will not pass on this change to card owners, which is unfair to petrol pump owners who have already been facing issues with payments. Moreover, the information regarding the levying of transaction fees was communicated to petrol pumps only on Saturday night.
According to the RBI's notification, the MDR is charged between 0.25 and 1 percent for a debit card transaction and 1 percent is deducted for a credit card transaction.
Speaking to The Hindu, Ajay said that the decision to stop accepting card payments has been conveyed to petroleum ministry and finance ministry officials. He added,
“We are operating on a very thin margin. We cannot afford this deduction. Hence, we have no other go than to stop accepting debit and credit cards.”
He further stated to the Times of India that banks usually bear the cost of the transaction network of swiping machines, with an agreement on the profit margins (with establishments). Hence, when banks plan to levy these charges, the establishments can’t increase the prices, which have been decided by the oil companies.
Times of India reported that in Delhi, the ministry officials seemed to be unaware of the move, asking the dealers to put off the decision until a compensation scheme for petrol pump dealers is discussed by all stakeholders.
Further, dealers told TOI that this MDR or transaction fee will wipe out their profits, which stand at 0.3 percent to 0.5 percent, according to BR Ravindranath, President, Akhila Karnataka Federation of Petroleum Traders and Bangalore Petroleum Dealers Association.
Moreover, according to the AIPDA, credit card machine issuers seem to be delaying settlements and not settling dues satisfactorily.
Also, there seem to be disputes about purchases being returned or not delivered.
While the hustle continues, what is surprising is that last month, the Government of India had asked banks to ensure that an additional 10 lakh Point of Sale (POS) terminals were deployed post demonetisation, which had led to a scramble among banks to procure that number.
And just yesterday, NITI Aayog CEO, Amitabh Kant, reportedly said that given the big push to digital transactions post demonetisation, ATMs and POS machines will become redundant in the country by 2020.