ASSO not happy with the usage of credit and debit cards

18 Feb 2014 15:10pm
WINDHOEK, 18 FEB (NAMPA) – The Association of Service Station Owners (Asso) has urged the Bank of Namibia (BoN) to grant extensions for the use of petrol and garage cards until commercial banks can come up with suitable replacements.
In 2013, BoN served a notice to all financial institutions that the usage of garage/petrol cards would be phased-out and would no longer be accepted as legal tender for purchases of fuel, spares or repairs in Namibia by 28 February 2014.
The regulation pertaining to the ‘Determination on the Conduct of Card Transactions within the National Payment System (PSD-4)’ came into effect on 30 June 2013.
Asso chairperson Rupert Harmse told Nampa on Tuesday that service station owners have problems with debit and credit card payments, because the burden of banking fees for such payments are placed on service station owners.
These fees are different from petrol and garage cards, where the banking fees are placed on the cardholders.
“Our calculations show that at a banking fee of 1.5 per cent, service station owners will show a loss of six cent per litre on every litre of fuel sold by them,” explained Harmse.
He argued that the petrol and garage cards are South African products, and cannot be accommodated through the Namibia Card-Switching Service (Namswitch).
NamSwitch is Namibia’s card system, which replaced the South African Switching Service (Saswitch).
It entails the switching of all domestic interbank card transactions at automatic teller machines (ATMs) via Namswitch and all international card transactions, such as transactions initiated by cards which are issued by non-Namibian issuers, being routed via either Visa or Master Card.
The Namibian banking industry has not developed a similar product which can replace petrol and garage cards, Harmse said, noting that the Ministry of Mines and Energy, as a regulatory authority in charge of retail fuel, made announcements earlier that the banking costs involved in credit and debit cards transactions would not be included in the retail margin.
This means that service station owners will not be compensated through their margins for these costs, and will therefore be required to pay it out of their own pockets.
The Asso chairperson further stated that the line ministry pointed out that it is not prudent to expect service station owners to pay for costs involved in debit and credit card transactions.
“The Ministry of Mines and Energy, therefore, resolved that fuel should be paid for in cash, and that it is the choice of every service station owner to decide whether they will accept debit and credit cards,” Harmse said.
The ministry further resolved that the banking industry should come up with an appropriate solution, which will not result in service station owners incurring the costs of these transactions.
“The Ministry of Mines and Energy stated in an official correspondence to ASSO that the retail fuel dealers will therefore have freedom of choice of accepting credit and debit cards, and they will not be obliged by anybody, including the financial institutions and their oil companies, to accept such cards,” Harmse continued.
He said the Petroleum Regulations of 2000 also prohibit any payment for fuel otherwise than by means of cash, and also prohibits the discounting of fuel.
Fleet-cards remain acceptable since they have been granted exemption from the BoN regulation until 2015.
Meanwhile, the Bankers’ Association of Namibia urged all petrol and garage card-holders to contact their banks’ 24-hour Customer Contact Centre partnering the phasing-out of such cards.
In a statement issued here on Friday, BAN’s Public Relations’ Committee member Thaddius Maswahu said as from 01 March, the method of payment could be through cash or using debit cards when filling up vehicle tanks at filling stations.
“From our side, BAN will consistently engage with fuel stations to persuade them to accept debit and credit cards for convenience sake,” he added.