Fuel retailers operating Hindustan Petroleum Corp Ltd-supplied gas stations are asking India's competition regulator to intervene with the oil company in a dispute involving credit card terminals, local newspaper Mint this week reported.
The gasoline retailers have requested the Competition Commission of India to restrain the oil firm from compelling them to use the card-swipe terminals of selected banks, according to the report, which cited unnamed sources.
Hindustan Petroleum has asked retailers to terminate their individual arrangements with various banks that provide them with credit card terminals, and rely instead on those of ICICI Bank Ltd, Axis Bank Ltd and American Express Bank, the report said.
However, retailers want the freedom to use the credit card terminals of any bank they choose; the commissions they earn from various banks are an important revenue stream.
An official at Mumbai-based State Bank of India Ltd tells PaymentsSource customers pay a service charge for each credit card-based fuel transaction, which generates a 2.5% fee. Banks typically share 1% to 1.3% of that fee with the fuel retailers.
The official speculates that retailers fear banks may not pay them their portion of the commissions if merchants are required to offer only the credit-card swipe terminals of select banks. “With no individual arrangements, these banks may not be liable to pay commissions,” he says.
A Hindustan Petroleum merchant tells PaymentsSource that retailers earn anywhere between 20,000 rupees (US$428 or 330 euros) and 50,000 rupees per month, and credit card sales account for almost 20% of retailers’ total sales.
The three banks and Hindustan Petroleum did not respond to requests for comments.
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