Petrol pumps across the country will not accept credit and debit card payments for fuel sales from Monday after banks decided to put transaction (MDR) charge on them instead of consumers.

To promote cash-less transactions, the government had waived the Merchant Discount Rate (MDR) on fuel purchase post demonetisation for consumers. But after the expiry of the 50-day window, the banks have decided to levy MDR on petrol pump owners.

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Petrol pump owners association said they have been "informed by HDFC Bank that we will be charged 1 per cent on all credit card transactions and between 0.25 per cent and 1 per cent on all debit card transactions from January 9, 2017.

The same will be debited to our account and net transaction value will be credited to our account".

Ajay Bansal, President, All India Petroleum Dealers Association, said the bank has quoted RBI circular of December 16, 2016, for its action.

"Unfortunately, the circular has no 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," he said.

He said petrol pump margins are fixed on a per kilolitre basis and do not have any scope to absorb these charges.

"We have specific mechanism to compute the margin and these do not have any scope for credit card MDR. This will lead to financial loses for the dealers," he said, adding that credit card machine issuers are also delaying settlements of dues.

Also, 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 loses to a large percentage of the dealer community." 

He said the petrol pumps have "decided to stop accepting payment through credit/debit cards from January 9, 2017".

"All POS (point of sale) 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," Bansal said.