Petrol stations: how far does the fight for card payments go?

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In December, gas stations issued a warning: they would not accept credit cards from their customers as of February 1st, until the (historical) conflict facing them with plastic issuers over the amount of commissions and terms of crediting payments is resolved.

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However, the industry has decided to postpone that decision as it continues to negotiate with plastic issuers. Meanwhile, YPF have made it clear that their entire network will continue to accept plastic.

The owners of the Confederation of Hydrocarbons and related commercial entities of the Argentine Republic (CECHA) nuclear power plants have chosen to postpone the decision. “We won’t cut, we have a next fight on February 9th: that’s where we will decide”, said Gabriel Bornoroni, president of the institution. Meanwhile, the service stations that are owned by the oil companies they will normally accept plastic.

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Yesterday, YPF, the leading oil company in the market, said in a statement that “credit card payments will continue to be accepted throughout its network consisting of more than 1,600 gas stations across the country, and that there were no problems with this method of payment”.

“The entire network of YPF petrol stations – own and flagship – benefits from the advance crediting of transactions made with Visa and Mastercard cards. This allows operators to receive credit within 48 working hours. In addition, they have a commission of facilitated transaction of 1.3% under an agreement between YPF and the data processing company,” the company said.

The controversy has escalated to the rest of the stations because they say so the commissions they pay are too high and too Because too much time passes between the moment the customer swipes their card and the company actually receives their money.

The claim is that the payment term is within 48 hours, as is the case in countries such as Brazil, Chile and Uruguay, where credit card issuers operate similarly to those used in the local market, they argue.

They also point to a precedent on the matter: In the US, Visa and Mastercard are collectively sued and have agreed to pay back up to $6.24 billion to merchants.

For this reason, through a press release, they warned that they will not accept plastic starting from February 1st in a risky move taking into account that currently 60% of fuel costs are paid by card and until five years ago they were 30%.

The other issue that the stations are asking to review is the commission they currently charge for sales made at gas stations, where together with the taxes it reaches the From 1.5 to 1.8%, while in neighboring countries it is 0.5%.

The Confederation explained that the marketing of fuels has a “very low” profit margin, so the percentage that broadcasters charge service stations transforms them into majority shareholders, above all because the tax is charged on the total amount of fuel, also representing over 50% of the taxes collected for the Treasury.

“From time to time, the demands of operators regarding commissions and payment times for card purchases return, especially in contexts of lagged prices and monthly inflation which exceeds the increments of fuels (and, consequently, their income)”, underlined by one of the oil companies operating in the market.

The demand of gas stations has an incentive a favorable ruling in the first instance for the province of Santa Fe, obtained by FAENI, one of the main member federations of CECHA which initiated the trial in 2018 against Prisma Medios de Pago SA.

This ruling established that, henceforth, in Santa Fe, the scope of action of the agency, the commission for the sale of fuels It should be no more than 0.5% and credited payments in three days.

The sentence is not definitive and there could be an appeal, they clarified in FAENI. But the institution called it “historic” for having understood that “current conditions put the livelihoods of many SMEs in the sector at risk”.

In the meantime, CECHA considered the sentence “an extremely significant precedent”, and underlined that Faeni “indicates in its claim the abusive conditions imposed by a purely financial entity which acts as a passive partner and collects the scarce benefits generated by the marketing of fuel , repaying the balance in the most economically convenient term”.

Source: Clarin

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