The majority of fuel stations under Oil Market Companies (OMCs) have reportedly stopped accepting payment via credit/debit cards for petrol and diesel because of the high (1.5 percent) merchant discount rate (MDR) charged by commercial banks.
An OMC official told a national daily that banks are pocketing Rs. 3.45 in MDR from the margin of Rs. 3.68 on one liter of petrol and diesel when a consumer makes a purchase via credit or debit cards, with leeway to squeeze the OMC margin to just Rs. 0.23 per liter and put the OMCs’ financial health at risk.
The annual sale numbers of motor gasoline and diesel show that the country has used up 20 billion liters, of which 400 million liters were sold through credit and debit cards, and if the average price of petrol and diesel was assumed to be Rs. 230 per liter, the value of bank card sales came to Rs. 92 billion per year.
Banks charge 1.5 percent MDR on one liter and earn Rs. 1.38 billion in MDR, not from consumers but from OMC margins. The OMCs’ annual profit margin on bank card sales is Rs. 1.472 billion, of which Rs. 1.38 billion goes to banks, leaving a net margin of Rs. 92 million. This is why OMCs cannot continue to sell fuel via credit or debit cards.
The latter demand that the MDR should be reduced from 1.5 percent to 0.3 percent. The oil industry recognizes the importance of improving Pakistan’s digital payment infrastructure but the current level of MDR charged on fuel transactions is unsustainable for the industry.
It is worth mentioning that on 22 August 2022, the oil companies’ advisory council (OCAC) wrote a letter to the State Bank of Pakistan (SBP) on behalf of the OMCs to raise the issue of banks charging higher MDR.
In the letter, the OCAC built a case for the OMCs and sought a review of the MDR rate of 1.5 percent on fuel purchases made with credit or debit cards, contending that while the MDR varies across the industry, banks charge an average of 1.5 percent at petrol pumps across the country, and the cost is borne by the OMCs and their dealers (petrol pump owners and operators).
Given the high turnover of fuel, and to assist customers while not burdening the OMCs and dealers, the OCAC proposed to the SBP governor that MDR on fuel purchased be capped at 0.3 percent.
WTF
There was a news that SBP promoting Digital Banking and here is the outcome. Without practical regulations press conferences, releasees and objectives are nothing but trash.
Maybe, it’s time for SBP to introduce QR support for RAAST to enable petrol pumps as well as other vendors to collect payments digitally without paying a margin to banks/card networks.
Another copy attempt by Propakistani. STOP copying Profit Magazine’s articles please
They are known copy cats …..
Petrol station are charging 1.7% for card transactions.
Koe Khair ki Khabar suneny ko nahi mil rahe aj Kal Pakistan may. Pehly na ehal imported govt humaray sarrun pe betha di, phir fuel ki prices k bharny k na rukny Wala silsila, bijli ki prices may ezafa, har cheez mehngi. Ab in manhoos petrol pumps walun ki Haram zadgi shuro ho gyi hy, duniya digitalization ki duniya se bhi agay j chukki hy aur hum….. Jistarah k halaat hyn , jaib may cash rakhna mushkil ho gya hy, aye Roz street crime aur gun points pe lut Jana, debit card k through shopping aur fuel payment convenient hy, ab ye aik aur nai peryshani may qoum ko dochar karny lagay hyn. Kahen se toh chor do is qoum ko.
This is a,lie. I just paid via a debit card !
OCAC and OMC should also ensure that petrol pumps stop the theft of petrol when fueling.
There are scenarios where 25% to 50% petrol is theft by these petrol pumps. Which are directly impacted the vehicle owners.
Petrol pumps are charging Rs 15 per litre in the name of tax and when asked they rudely reply that don’t ask us, just go and ask government. This is bullshit