OMCs want banks to cut the card transaction fees on petrol and diesel purchases by half, Livemint reported while citing four people aware of the development. The sources told the financial daily on the condition of anonymity that the companies would approach the banks with the proposal at a meeting on Monday.

One of the above sources, an official from an OMC, told the financial daily that the company was in discussions with banks and that it wasn't ready to pay more than what it had been paying already. "As per the latest rules, rates are higher. We want banks to halve it," the official added. The issue revolves around the merchant discount rate (MDR), a fee that every card transaction attracts, which is paid by the merchant (OMCs) and shared between the bank that owns the card machine, the bank to which the card belongs and payment networks like Visa or MasterCard. Since 2017, the report added, OMCs have been paying the MDR on behalf of their dealers.

Why are the OMCs worried? After the Reserve Bank of India (RBI) changed the applicable MDR rates in December last year, OMCs would have to pay more MDR than before, the report said. Under the regime that was applicable till December 31, 2017, transactions below Rs 1,000 attracted 0.25 per cent MDR, transactions between Rs 1,000 and Rs 2,000 attracted 0.5 per cent MDR, and transactions of even higher amounts attracted one per cent MDR. After the RBI changed the rules, with the changes being applicable from January 1, businesses with an annual revenue below Rs 2 million would face an applicable MDR of 0.4 per cent of the transaction's value or Rs 200, whichever is lower; for other businesses, the applicable MDR rate would be 0.9 per cent of the transaction's value or Rs 1,000, whichever is lower.

However, according to the Livemint report, banks might not prove to be receptive to the OMCs' demand. One of the above cited sources told the financial daily that the bankers' stance was clear: "they won't be sharing any charges." While stating that banks were willing to hold further talks, the same source said that it was the government's and regulatory direction that OMCs would have to bare the charges. The source added that the bankers felt there was no need to "pay for their own income".

The MDR is not the OMCs' only headache. Apart from it, they also have to contend with a 0.75 per cent discount on fuel purchases if the customer makes a digital payment at a petrol pump. This money will come back into the consumers' bank accounts within three working days. The government announced this measure in December of 2016.