Credit card service will not end at CPC gas stations: official

By Alan Fong, The China Post

The government will not allow a stalled bid invitation by the station-owned fuel company CPC Corp. disrupt the plastic payment service in CPC gas stations, the economic minister said yesterday. The China Times reported yesterday that CPC had tendered five failed bid invitations for a credit card transaction service at its gas stations because its current contractor Chinatrust Commercial Bank decided against deal renewal because the banks find the terms offered by CPC unattractive. As a result, motorists will have to pay with cash when filling up their tanks at the CPC’s 2,000 plus gas stations beginning May 27, the day the Chinatrust contract expires. The oil refiner is still in talks with potential bidders and a three month contract extension is being considered to cover the credit card payment service until Aug. 27, CPC Chairman Chu Shao-hua said in answer to lawmakers’ inquiries at a Legislative Yuan Economic Committee hearing yesterday.

Losing the plastic payment service would greatly impact the CPC, which receives NT$4.5 billion per month through credit card transactions, said CPC President Lin Maw-wen. Currently about 40 percent of sales at CPC gas stations are using credit card transactions. Economic minister Shih Yen-shiang stressed at the hearing that the Ministry of Economic Affairs, which supervises the state-run company, “cannot allow such a situation to occur.” CPC Corp. last year decided to end its contract with Chinatrust by holding a public tender for service providers in conformity with the Government Procurement Act. Five consecutive tenders, however, failed to attract any willing bidders as most banks were discouraged by the lack of subsidies in the contract terms.

The China Times quoted bank executives as saying that the plastic transaction service was “almost non-profitable” business for providers. Chinatrust were interested in working with CPC eight years ago mainly because it was eyeing the more profitable deal of issuing joint credit cards with the CPC. After the CPC ended its joint credit card operation November 2010, Chinatrust has no incentive to continue its cooperation with the CPC, the China Times reported. The newspaper also quoted CPC officials as saying that the state-run company is considering putting joint card issuing back into the equation in order to attract bidders.