Indian Prime Minister Narendra Modi took a historic move by announcing demonetization on Nov 8th, 2016. He is striving hard towards his dream of the cashless economy since the very first step of his rule.
Recently, he launched the mobile application ‘BHIM’ through the National Payments Corporation of India (NPCI) to ease a pathway towards digitalisation and cashless economy. Everything was going on smooth until this happened.
But, Modi’s push for a cashless economy seems to have suffered a setback with the All India Petroleum Dealers Association deciding to stop accepting payments through credit/debit cards.
Yes, petrol pumps will NOT accept cards from Monday, only cash payments will be accepted. This decision was taken after a 1 percent transaction fee was applicable on card payments, which has to be borne by petrol pump owners.
It has been reported that customers will not be affected as they don’t have to pay an extra surcharge while making card payments, which is unfair to petrol pump owners who have already been facing issues with payments.
Banks sent sudden notices yesterday, about this 1 percent surcharge on card payments and this took the Oil Ministry by surprise. This is the reason why plastic money will be stopped from Monday.
HDFC and ICICI bank account for over 60 percent of the machines across the country and this move will surely cause a lot of inconveniences.
As of now, Ministry officials have asked to put this move on hold and discuss some mid-way out. A detailed discussion between petrol pump owners, banks and stakeholders-state run fuel retailers is going on.
Ajay Bansal, the president of All India Petroleum Dealers Association stated that they are firm on this decision of withdrawing card machines from the today midnight.
Earlier 0.75% cashback was offered by the government to promote cashless transactions, now they have implied 1 percent surcharge on card payments.
According to the latest reports, the move had prompted dealers to say they would stop accepting plastic money unless a mechanism to compensate them was also put in place. Petroleum dealers have now said they will accept cards till January 13.
The move by petrol pump owners will also impact the government’s big push towards going cashless and this is surely going to cause a lot of problems in this time when there is severe cash crunch.
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