The All-India Petroleum Dealers’ Association (AIPDA) has decided to stop accepting payment through credit and debit cards at retail outlets with effect from January 9. This follows the decision of some banks to charge for the card transactions.
Addressing newspersons on the sidelines of a conference in Mangaluru on Sunday, Ajay Bansal, President of AIPDA, said that HDFC Bank and others have informed the petroleum dealers that they will be charged 1 per cent on all credit card transactions and between 0.25 per cent and 1 per cent on debit card transactions from January 9.
The total margin of the petroleum dealers is around 2.5 per cent. The dealers have to bear the staff cost and other maintenance related activities at the retail outlet from this.
In such a situation, petroleum dealers cannot give 1 per cent of their margin to banks, he said. “We have specific mechanisms to compute the margin and these do not have any scope for credit card MDR (merchant discount rate). This will lead to financial loses for the dealers,” he said.
(MDR is the commission charged by the bank that provides the necessary infrastructure to the merchant to accept payments using cards.)
As a result, it has been decided to stop accepting payment through credit and debit cards from January 9 in 53,840 retail outlets across the country, Bansal said. The association has written to the Finance and Petroleum Ministries in this regard, he said.
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