Oil firms to bear MDR fees on card payments at fuel stations
The mess over merchant discount rate (MDR) at fuel stations is close to resolution.
State-owned fuel retailers Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd have agreed to pay MDR, a fee on card usage at swipe machines, for fuel purchased using debit cards. This means neither the fuel buyer— who used to pay this fee—nor the dealer will have to pay it.
Two officials from OMCS who confirmed the development said a notification on the same is likely in a few days. Both spoke on condition of anonymity.
“The implementation process is being worked out now. Earlier, the fuel dealers used to be debited with the MDR and then there was a process of reimbursing them. Now, we are going to directly route MDR through the OMCS to the bank,” said one of the two officials cited earlier.
MDR is a bank fee levied for using debit and credit cards on swipe machines. The fee is 1% on credit card transactions and 0.25-1% on debit card transactions. MDR is levied at the time of purchase, and paid to the bank.
Following demonetisation, the government waived MDR at fuel stations till December 31 to encourage cashless transactions. However, when banks demanded MDR in January, the All India Petroleum Dealers’ Association and Consortium of India Petroleum Dealers refused to pay and threatened to discontinue card transactions. The government stepped in at that time and brought fuel retailers, dealers and banks to the table.
Emails sent to Indian Oil, Bharat Petroleum and Hindustan Petroleum on Friday went unanswered.
For OMCS, the burden of MDR comes on top of a 0.75% discount for purchase of auto fuel using credit and debit cards and e-wallets. The discount came into effect on December 13, 2016.
“MDR would be borne only on debit cards as on credit cards, the customer is already enjoying a 30-40 day credit period and in addition to a 0.75% discount. So, over and above this twin benefit, we thought that people who can afford a credit card would not mind a 0.25% to 1% charge on payments,” said the second of the officials cited earlier.
OMCS said as of now, they plan to bear the charges only up to 31 March, as per directives from the Reserve Bank of India. They have, however, not decided if they would approach the government seeking compensation for the revenue losses incurred due to the discounts offered.
A day after H&M holds its annual runway show in Paris on 1 March, the H&M store at Select City Walk, New Delhi, will feature the brand’s Studio collection. Select City Walk is the only Indian location among 200 marque stores that fashion retailer has chosen as it aligns itself for the first time to the ‘see now, buy now’ or ‘ready to retail’ movement which is catching on among fashion and luxury retailers globally.
Usually fashion weeks showcase collections that hit stores 4-6 months later. However, because of digital media, consumers can now see the collection presented on social media sites such as Facebook and Instagram, and are demanding for faster access.
The Swedish retailer joins brands like Burberry, Ralph Lauren, Tommy Hilfiger and Tom Ford which have joined the ‘ready to retail’ movement in the last year.
“The new era in the fashion industry, to bring fashion immediately from catwalk to customer, is an exciting format which H&M is very much are looking forward to testing,” said a spokesperson for H&M Hennes & Mauritz Retail Pvt Ltd.
Select City beat Mumbai’s High Street Phoenix mall and Ambience Mall in New Delhi to get the collection first launched in India, Select City Walk was where it opened its first store. Store opening is also a function of space availability and the mall is known for its uncanny ability to make space for new tenants. Last year when Massimo Dutti and Gap launched in India they too chose the Delhi mall to open their first stores.
What works for the mall is probably its higher sales per square feet, say experts. “Retailers like H&M do a sales review of each one of their stores and monitor sales of new collections and how fast they get sold at each location. Delhi probably is chosen based on its sales metric,” says Troy Costa, a fashion designer who counts Prime Minister Narendra Modi among his clients.
“Delhi is one of the largest retail market for any category,” said Vivek Kaul, head, retail services India at CBRE South Asia
Bengaluru Online freight aggregator Blackbuck (Zinka Logistics Solutions Pvt. Ltd) has received commitment of $30 million from a clutch of new and existing investors for a Series C funding round, two people aware of the development said.
Out of this, Us-based venture capital firm Sands Capital and World Bank arm International Finance Corp. have committed about $10 million each, the two people said on condition of anonymity.
Existing investors Accel Partners and Flipkart Ltd, along with angel investor and ITC Ltd executive Sanjiv Rangrass, will participate in this round.
Two other existing investors, Tiger Global Management and Apoletto, the personal investment firm of Russian billionaire and founder of DST Global, Yuri Milner, are likely to stay away from investing further, these people said.
The company is also in talks with new investors to raise at least $30 million more after rival Rivigo raised $75 million from Warburg Pincus in November last year, one of the two persons cited above said.
Blackbuck had earlier raised $30 million in quick succession in 2015; a $25-million Series B round from Tiger Global, Accel Partners, Apoletto and Flipkart in September, and $5 million in a Series A funding round from June.
Blackbuck did not respond to an email sent on Sunday seeking comment.
Blackbuck was founded in April 2015 by former ITC Ltd executives Rajesh Yabaji and Chanakya Hridaya along with Ramasubramaniam B., a trans port industry veteran.
The company acts as a market place connecting potential cus tomers, who are essentially large and small businesses, with truck owners and freight operators for inter-city transport of goods.
The firm covers 300 locations across India and has about 100,000 truck owners and freight operators listed on its platform. It employs about 1,000 people.
Its customers include ITC Ltd Asian Paints Ltd, Britannia Industries Ltd and Marico Ltd.
“Blackbuck and Rivigo are the only scaled-up startups in this sector. Besides, Blackbuck is asset-light since they don’t own trucks, which makes it an attract ive investment option. Sands Capital and Internationa Finance Corporations have been active in the Indian start-up space of late and understand the land scape quite well ” said one of the