Banks, oil companies to bear card payment charges at petrol pumps

Petrol Pump

New Delhi, January 12: Oil Minister Dharmendra Pradhan after a meeting with Finance Ministry said on Thursday that consumers will not bear MDR charges on debit cards as banks and oil marketing companies will bear the cost of buying fuel using cards at petrol pumps.

“The decision is very clear. Consumers will not be burdened with Merchant Discount Rate (MDR). Retail outlets (petrol pumps) will also be kept out of its purview. Now it is between banks and OMCs how they share it,” Pradhan said.

“It is a commercial decision and they (banks and OMCs) will sit together and sort it out,” he said.

MDR is a charge being levied on merchants by banks for accepting payments through credit and debit cards. Post the expiry of demonetation deadline on December 30, this charge was passed on to consumers as it was earlier waived off to promote digital transactions by government.

Banks, after that date, decided to pass on the MDR to petrol pump operators since the government mandate was very clear that consumers should not be burdened with any additional charge for using cards for payments.

Petrol pump owners threatened to stop accepting card payments, forcing the government to broker a settlement.

Pradhan said banks and oil companies will continue to discuss as to who should bear these charges and in what proportion.

“MDR charges will be levied as per RBI guidelines of December 16,” he said.


Also the 0.75 per cent discount on fuel rate for using digital payments will continue. “Banks and OMCs are discussing the issue. In the next couple of days a mechanism will be worked out so that MDR are levied from 16th,” he said.

MDR of 1 per cent on all credit card transactions and between 0.25 per cent and 1 per cent on all debit card transactions will be charged on fuel bought through cards.

Pradhan said “neither the customers nor petrol pump dealers will bear additional charges on digital transactions at petrol stations”.

Wefornews Bureau

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