Push for cashless economy suffers setback as petrol bunks refuse plastic money from today

MANGALURU: Prime Minister Narendra Modi’s push for a cashless economy seems to have suffered a setback with the All India Petroleum Dealers Association deciding to stop accepting payments through credit/debit cards from Monday in view of the debit of Merchant Discount Rates (MDR) on fuel transactions of 1%.
Ajay Bansal, president of the association, said 53,840 petroleum outlets in India will not accept payment through cards till their demands are met.He said the association has sent a letter to the finance minister Arun Jaitley to find a solution to the issue.
He was speaking to media persons at the valedictory of ‘Thaila Samagama 2017’ - a two-day meet of petroleum dealers organized by the Karnataka State Federation of Petroleum Dealers, here on Sunday.
“We have been informed by HDFC and other banks that we will be charged 1% on all credit card transactions and between 0.25% and 1% on all debit card transactions from Monday. 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 this circular nor the circular referred to by the above said circular have any reference to the 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,” Bansal said.
“Our margins are fixed on a per kilo litre (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 losses for the dealers. Also, 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 credited to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community,” he said.
The association requests all POS machine issuing banks who are not charging the same and are willing to adhere to the existing commercial arrangements, to correspond to let association inform its members to continue with accepting cards on their machines, Bansal said.
Bansal said, “We know very well the inconvenience that consumers will be facing through the move. We have extended our support to PM’s initiative of cashless economy. However, we have no other option before us as our profit is just about 2.5%. We have to operate the outlet by paying salary to the workers and bear the losses occured due to evaporation. We are not in a position to increase the price of petrol and diesel too. We hope that the government will look into the matter as soon as possible.”