Banks defer decision to charge 1% transaction fee on card payment at petrol pumps

New Delhi: In a  huge relief to vehicle owners across the country, banks on Sunday deferred their decision to charge one per cent levy plus taxes on all transactions made through debit and credit cards at petrol pumps.  Meanwhile, petrol pump association also postponed their decision to not accept credit and debit cards for fuel purchase till January 13. Earlier in the day, the Petrol pump association had decided to stop accepting payment through credit and debit cards till the decision to levy these additional charges were reversed.

In a letter to Finance Minister Arun Jaitley, All India Petroleum Dealers Association (AIPDA) President Ajay Bansal wrote that the HDFC and other banks will start charging 1 per cent on all credit card transactions, and between 0.25 and 1 per cent on all debit card transactions from Monday. "The same will be debited to petroleum dealers' account and net transaction value will be credited to our account... This will lead to financial loses for the dealers," Bansal wrote. However, he added, if any bank is not charging additional MDR and corresponds the same to the association, the petrol pumps having Point of Sale (POS) devices of those banks will keep accepting cards. AIPDA West Bengal unit's General Secretary Saradindu Pal told IANS: "If banks start levying fees, it will cause squeezing of dealers' margin." AIPDA's decision comes at a time when the centre had directed state-run oil companies to offer a 0.75 percent discount on the price of petrol and diesel to consumers paying by cards or mobile wallets to encourage people towards digital payments. "This discount amount was supposed to be reimbursed to the dealers, but is not being executed properly," Pal said. He said dealers have been working on a low margin and demanded raising the dealers' commission to 5 percent from the existing rate of 3 percent taking petrol and diesel together.