Gasolene retailers have decided not to accept Visa and Mastercard credit cards as payment for fuel after a meeting with local banks to bargain for a lower rate on processing fees proved unsuccessful.

The decision is unanimous across the group, according to its chief spokesman, Errol Edwards.

The Jamaica Gasolene Retailers' Association (JGRA) membership covers 190 operators who control 300 stations islandwide.

accepted cards

The station operators, however, will accept debit cards and the local National Commercial Bank Keycard credit card, Edwards, who is president of the JGRA, told Sunday Business on Thursday.

"The negotiations are not over, but we are at a stage where we will proceed to accept it (Keycard) because the effect of all of this is that when the business shifts from Mastercard and Visa and goes to the local Keycard, we are going back to them."

While not disclosing the actual rate, Edwards said the JGRA was able to iron out a lower processing charge for Keycard, whose rate was originally quoted at 1.8 per cent per transaction, compared with a 2.3 per cent per transaction for Mastercard and Visa credit cards.

The JGRA said negotiations were ongoing, hence the decision not to reveal the new rate.

He said the banks were unable to offer a cheaper rate for the Mastercard and Visa derivatives, whose rates are based on those set by their international parents.

"The recommendation to our members is for them to accept only the Keycard and the debit cards for fuel transactions," he said. "Mastercard and Visa cards will only be accepted if the cardholder is prepared to offer to pay (the transaction fee)." He stressed that gas-station operators would not be requesting customers with Mastercard and Visa to pay the transaction fee, but that the station would only facilitate the transaction if the customer offered at his or her own discretion to pay the 2.3 per cent charge.

The issue of the cost of credit- card processing fees has been a long-standing contention between banks and gas-station operators who complain that the processing fee ate into already-thin margins of four per cent, and was uneconomical for their business.

high transaction fee

The gasolene dealers have contended that the transaction fee was eating up more than half of their margins, which is the return they get for selling petroleum products supplied by oil-marketing companies.

The impasse led to the JGRA last month serving notice that its members would no longer accept credit cards from customers to pay for petrol.

Some petrol stations had long stopped accepting plastic, while some allowed it only for the purchase of higher-octane fuel of a certain value, or on condition that customers paid a transaction fee.

The acceptance of only NCB's Keycard credit card would essentially eliminate customers who are credit-card holders of other institutions, as NCB is the only bank in Jamaica that has its own brand of credit card on the market.

john.myers@gleanerjm.com