Petrol bunks to stop accepting cards from midnight, carry cash with you

No relief for the common man.
Petrol bunks to stop accepting cards from midnight, carry cash with you
Petrol bunks to stop accepting cards from midnight, carry cash with you
Written by :

Starting from Monday, petrol bunks across India are going to accept only cash as a mark of protest against the Merchant Discount Rate levied by the bank for credit/debit card  transactions.

This decision comes after President of All India Petroleum Dealers Association Ajay Bansal held a two-day state level convention of petroleum traders in Mangaluru.

From Monday, banks are going to levy an additional  service charge (0.25-1%)  as Merchant Discount Rate for debit card transactions and 1% for credit card transactions.

However, which would come as a relief for consumers, petrol bunks will accept prepaid wallets like PayTM and the government’s own BHIM app as long as there is no charge for every single transaction. 

You can read the full statement below:

We have been informed by HDFC and other Bank that we will be charged 1% on all Credit Card Transactions and between 0.25% and 1% on all debit card transactions from 9th January 2017. The same will be debited to our account and net transaction value will be credited to our account. They have quoted RBI Circular DPSS.CO.PD.No.1515/02.14.003/2016-17 dated 16th December 2016 as the root cause of this debit. Unfortunately, neither that circular nor the circular referred to by the above said circular have any reference to Credit Card Charges or for not passing the same to the customers. We feel that HDFC Bank is using this as an excuse to improve their bottom line through transactions at fuel stations. Both RBI Circulars are enclosed along with HDFC Bank advice to dealers.

Our margins are fixed on a per KL basis and do not have any scope to absorb these charges. We have specific mechanisms to compute the margin and these do not have any scope for credit card MDR. This will lead to financial loses for the dealers.

To compound maters further these credit card machine issuers are delaying settlements and not settling the entire dues as per our settlements. There are disputes about purchases being returned or not delivered. In a Retail Outlet there is no scope for returns or not being delivered a product once you have paid for the same. The reconciliation of swipes to amount being credit to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community.

In view of the debit of MDR of 1% it has been decided to stop accepting payment through Credit/Debit Cards from 9th January 2017.

All POS machine issuing banks who are not charging the same and are willing to adhere to existing commercial arrangements should correspond with us to let us inform our members to continue with accepting cards on their machines.


Ajay Bansal, President

All India Petroleum Dealers Association 

Related Stories

No stories found.
The News Minute