OMC Digital Payments

India’s fuel retailing landscape is undergoing a structural shift with the re-entry of private players in recent
years. Looking at the huge potential in the fuel-marketing segment, a number of global players have also shown
interest in entering the fuel retail market in India. Due to commoditization and intense competition, enhancing
the customer experience will be key in determining the success of these players.

The overall number of fuel retail outlets increased from approximately 53,000 in financial year 2016 to
approximately 69,000 in financial year 2020, with a CAGR of approximately 5.4%. Public sector oil companies.
have a cumulative market share of approximately 89% of all the fuel retail outlets in India. Indian Oil
Corporation Limited (“IOCL”) has the highest market share of approximately 43%.

Number of fuel retail outlets in India FY15-F Y20, by OMC (in thousands) along with their growth rates

80
70
60
50
40
30
20
10
0

FY15 FY16 FY17 FY18 FY19 FY20

sIOCL sHPCL sBPCL mPrivate
~3.8% ~A.2% ~A.2% ~18.5%

Note: Private Segment include outlets managed by RIL, NEL and Shell.
Source: IPNG Statistics

All the major OMCs (namely, Hindustan Petroleum Corporation Limited (““HPCL”), IOCL and Bharat
Petroleum Corporation Limited (“BPCL”) have launched multiple closed loop programs for targeting their fleet
customers. For retail customers, they have launched co-branded open loop cards. These OMCs have also
enabled the acceptance infrastructure for cards, wallets, QR codes, and others.

In the closed loop card ecosystem, service providers manage the entire issuing and acquiring infrastructure for
the closed-loop program. Service providers charge a one-time implementation fee and recurring monthly
charges (based on the number of cards issued and POS terminals deployed). In the open loop ecosystem,
typically, OMCs have three to four POS terminals at the retail outlet, of which two to three terminals are used
for open loop card acceptance. POS infrastructure management service providers charge a percentage-based fee,
depending on the type of payment instrument accepted, such as debit cards, credit cards, BHIM and Bharat QR
along with any incurred rental charges for the POS terminals. For co-branded cards, the loyalty and surcharge is
jointly borne by the issuing bank and the OMC.

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