Customers will not bear charges on card transactions at petrol pumps: Dharmendra Pradhan

NEW DELHI: Government today announced that consumers and petrol pump dealers will not have to bear transaction charges for the fuel bought using cards at petrol pumps.

"Banks and oil marketing companies (OMCs) will bear any burden of Merchant Discount Rates (MDR) on card transactions at petrol pumps," Union minister Dharmendra Pradhan said.



"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," Dharmendra Pradhan said.

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

"Proper mechanism will be put in place by Jaunary 16th and the rate (within the RBI capping) will be based on the negotiations between OMCs and Banks," he said.

MDR is a charge levied on merchants by banks for accepting credit and debit cards payments. This charge was passed on to consumers but post-demonetisation, the government, in a bid to promote digital payments, waived it till December 30.

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.

Asked if MDR charges will be shared equally between the oil marketing companies (OMCs) and banks, he said: "That is yet to be decided."

Pradhan said the government stands by its decision that customers using non-cash digital modes of payments will not have to pay any transaction charge. Also, the 0.75 per cent discount on fuel rate for using digital payments will continue.

(Inputs from PTI)