Petrol pumps in Tamil Nadu may stop digital payments over cybercrime action

Petrol pump operators across Tamil Nadu have warned that they may stop accepting UPI and other digital payments after several dealers reportedly faced bank account restrictions and police scrutiny over transactions subsequently linked to cybercrime complaints.

The Tamil Nadu Petroleum Dealers Association (TNPDA), which represents around 5,000 fuel outlets, has sought chief minister C. Joseph Vijay’s intervention, arguing that merchants should not be penalised for accepting legitimate payments through authorised digital platforms.

In a letter to the chief minister, TNPDA president K.P. Murali said dealers were being drawn into cybercrime investigations despite having no involvement beyond receiving payments from customers purchasing petrol or diesel.

The association said fuel retailers had no means of verifying every customer’s identity or tracing whether money received through UPI or another digital platform had previously passed through an account associated with suspected fraud.

An average petrol station handles between 200 and 500 digital transactions each day, according to the dealers’ body. At some outlets, cashless payments account for more than half of daily revenue.

Problems arise when a transaction received by a fuel outlet is later flagged during a cybercrime investigation. Banks may place a lien on the disputed amount or freeze the dealer’s entire account on the instructions of investigating agencies.

The association said blocking an operational account over a single transaction could severely disrupt a fuel outlet’s business. Dealers depend on uninterrupted access to banking services to purchase fuel, pay employees and meet routine expenses.

The TNPDA also raised concerns about police action against retailers in such cases. It alleged that some dealers had been taken for questioning early in the morning without initially being given clear information about the transaction under investigation.

The association maintained that dealers should not be treated as suspects merely for receiving payments through approved digital channels. It urged the state government to introduce safeguards against sweeping account freezes and coercive action over transactions outside a merchant’s control.

Unless a workable mechanism is established, fuel retailers across Tamil Nadu may be forced to withdraw UPI and other cashless payment facilities and return to cash transactions, the association warned.

With IANS inputs