No More Cashback On Credit Card Payments At Petrol Pumps In India

Must Read

Free Netflix in India: A Result of Slow Growth In Q3 2020?

Netflix is testing a new strategy that could lead to free Netflix in India. The online streaming...

Tesla First Cancels Return Policy And Now Cuts Warranty Period

Just last week Elon Musk surprised everyone by cutting the price of Tesla Model S twice in...

Jio Pages: The Indian Browser Reliance Is Betting On Now!

Looks like Reliance wants to establish Jio as a synonym of technology. After launching a fleet of...

In 2016, in the wake of demonetization, the Indian Government directed state-owned oil companies to give its customers a discount of 0.75% on purchases made by credit or debit cards and digital payment services. This discount was delivered in the form of a cashback program which was credited to the customer within 3 days of making the transaction. As of October 1, 2019, this scheme will be discontinued for credit card payments, according to a message alert sent out by State Bank of India to its customers.

Following demonetization and policies to encourage a cashless economy, the share of digital transactions swelled from 10% in 2016 to 25% in 2018. At the same time, OMCs were expected to bear the merchant discount rate (MDR) of all the card payments they received. Thus, the amount of money the top three fuel retailers ended up paying to customers as cashback, and to banks as MDR, increased drastically. In 2017-18, it totalled to around Rs 1,431 crore, and increased to an aggregate of Rs 2,000 crore in 2018-19.

At present, this discount is only being discontinued for credit card payments. This means, discounts on debit card payments and other means of digital transactions still stand. It is hoped, nonetheless, that this change will help release some of the strain on OMCs. It can be expected that the discount might be lifted or decreased for other modes of payment, as well.


Cashback On Petrol Pumps: To Boost Digital Economy

Despite the apparent strain on the 3 biggest state-owned fuel providers – Indian Oil Corp, Bharat Petroleum Corp Limited, and Hindustan Petroleum Corp Ltd – India’s oil demand has recovered from the initial impact of demonetization. In January this year, the Oil Ministry’s Petroleum Planning and Analysis Cell announced that the country’s petroleum consumption increased by 4.1% in comparison to the previous year’s 2.7%, which was also the slowest rate of expansion since 2013.

To further support these findings, a report by the energy research and consultancy firm Wood Mackenzie stated that India’s demand for oil might soon surpass China’s, making it the 2ndlargest oil demand centre in the world, after the US.

As far as the success of digital commerce is concerned, the evidence seems to be mixed. The number of credit card transactions has consistently been growing over time.

The overall growth of digital transactions and its individual components has also been steady, as of data computed in 2018.

The availability of smartphones has been made more accessible, as has the availability of good data connections. This has made digital transactions more common and has increased people’s awareness about such modes of making and receiving payments.


However, it has also been observed that as currency notes have once more come back into supply, Indian consumers have reverted to making cash transactions in many cases.

Despite increasing access and knowledge, there are still many people who prefer tangible cash transactions due to scepticism and uncertainty regarding digital commerce.


Please enter your comment!
Please enter your name here

Latest News

Google Boots Out 3 Immensely Popular Android Apps from Play Store: Questions About Content Policing Resurface

With such a flourishing wilderness of Android apps on the Google Play Store, there is every likelihood...

Reliance Future Group Deal In The Soup: SIAC Orders To Put The Deal On Hold

When Reliance agreed to acquire Future Group for $3.4 billion, recently, the share of Reliance Industries Limited rallied on the stock market....

Can Facebook Be Trusted For Newly Announced Hosting and Shopping Services?

Every coin has two sides. For Facebook Inc. (NASDAQ:FB), the positive side says that it has launched interesting, new features to further...

When the Going Gets Tough, the Tough Gather Online

Tech shows; we all know them, love them, and wish we could get to them. Unfortunately, that's not always possible. Or is...

Flipkart, Amazon Hurtle To Secure Their Slice in Aditya Birla Fashion

The battle conch for the festive season has already been blown. Now in a bid to take control of a new frontier,...

Jio Pages: The Indian Browser Reliance Is Betting On Now!

Looks like Reliance wants to establish Jio as a synonym of technology. After launching a fleet of Jio products in the last...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This