15 October, 2007


Seems like the bitch fighting petrol companies had with the credit card firms about charges levied on credit purchases has escalated. So they have decided to transfer all the costs involved in facilitating credit card purchases onto the customer. Initially credit card purchases incur a 1.6% levy.

But now the have decided to take it one step further:-

"Motorists will not be able to pay for a tank of petrol by credit card at most petrol stations from Saturday."



Dubai Entrepreneur said...

Actually, I am 100% with Emarat petrol stations for taking this step. Banks have become disgustingly greedy.

Emarat are simply saying: we will not pass the cost on to our customers, you either get your act together or we simply don't want to make you any money. Period.

In fact, this has resulted in a very loyal customer to Emarat. I don't fill gas anywhere else.

Dubai Blogger said...

OK. So I am sure they factored an extra 1.5% into most items along time ago when determining the net cost. So if they can show a 1.5% reducing in prices I would actually believe this is being done to off-set charges. I think they are tired of giving away 1.5% and they want to retain it.

Also prepaid cards are big in the USA I personally like them if I am frequenting the same place in my town; but if I am traveling around they are a hassle.

Plus in the USA it is illegal not to re-credit people for money they do not use. So you always get points, like air miles, when you use the card so you can get bonuses later on and cash in your unused credit if you want it back.

Petrol stations are just trying to keep their prices the same in keep the fees as part of their revenue, that is my prediction.


AyMoNy said...

Dubai Entrepreneur..

You're saying banks have become disgustingly greedy. But I'm wondering, why is only petrol companies reacting to this?

All retails shops, restaurants, bars, etc are using credit cards and we never heard them complain. It's simply because accepting those credit cards get you more customers and more sales, and thus you cover the 1.6% charge and get even more profit off it.

First of all, I genuinely think not less than 30% of there sales are from credit cards. Which means now they will have 30% less sales which will go to competitors.

Oh, wait!

Competitors too are doing the same. Enoc and Eppco are definitely following Emarat on this, which leaves the consumer with no choice at all.

I hate monopoly. But what I hate more is "competitors" allying against the customers.

Brian64 said...

I agree with you Aymony... what's disgusting is everyone's greed in this situation... petrol stations and banks. But I have to say that the petrol stations are more at fault here it seems. One petrol manager was quoted as saying that 25% of his customers use a pre-paid card so there should not be any inconvenience. When did forcing 75% of your customers to another payment method NOT represent a huge inconvenience?

Oil at 85$ a barrel and the 'beat goes on'...

Dubai Entrepreneur said...

It's not always a case of a percentage. There is also a flat-fee per transaction. Now, if your average customer comes in and spends about 20dhs and decides to put it on a credit card, the petrol station will have to pay the fixed-fee + the 1.5% (or whatever it is).

I am not sure what the actual deal between the banks and petrol stations is -- perhaps some journalists may want to explore this and do some investigative reporting on it.

What I do know is, if they are having to pay the fixed fee per transaction, for such small types of transactions, it is a loss. If it is a simple percentage issue, I think that would have been solved by simply making credit card users pay the extra -- which is very common with retailers.

ammaro.com said...

situation in dubai seems to be getting ridiculous, small step by small step...

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