Trade and business associations across India have announced a “No UPI Day” on October 2 to protest the proposed 0.4% Merchant Discount Rate (MDR) on UPI merchant transactions above Rs 2,000 from October 15.
As part of the protest, associations plan to cover UPI scanners, QR codes, sound boxes and other related devices with black cloth on October 2, which is observed as Gandhi Jayanti.
The Maharashtra Chamber of Commerce, Industry & Agriculture (MACCIA) has called for the nationwide protest. MACCIA president Ravindra Mangave said trader associations across states have agreed to support the initiative. MACCIA and its 500 affiliate associations also plan to meet the Maharashtra Chief Minister to present their demands.
The Federation of Retail Traders Welfare Association (FRTWA), All India Consumer Products Distributors Federation (AICPDF), All India Mobile Retailers Association (AIMRA), All India Jewellers and Goldsmith Federation (AIJGF) and All India Edible Oil Traders Federation (AIEOTF) are among the associations supporting the protest.
Under the proposed framework, peer-to-peer UPI payments will remain free, while person-to-merchant (P2M) transactions above Rs 2,000 will attract an MDR of 0.40%, capped at Rs 300. Small vendors classified under person-to-person-merchant (P2PM) transactions will also remain exempt, covering businesses receiving up to Rs 1 lakh a month through UPI.
In August, UPI processed 15.51 billion P2M transactions worth a combined Rs 8.95 trillion. Payments above Rs 2,000 accounted for around 67% of the total transaction value.
The issue has also drawn attention from other sectors. Senior officials from the Ministry of Petroleum and Natural Gas recently met the All India Petroleum Dealers Association over its demand for an MDR exemption.
SEBI Chairperson Tuhin Kanta Pandey has also said the regulator will examine concerns raised by stockbrokers over MDR on large UPI fund transfers. Capital-market transactions have been assigned an MDR of 0.02%, capped at Rs 300.
AICPDF national president Dhairyashil Patil said traders operate on thin margins and questioned why they should bear the additional cost of digital payments.
AIEOTF national president Shankar Thakkar said trader groups may intensify their protest if the proposed levy is not reconsidered. He also said UPI has increased transparency across the retail payment chain by reducing cash usage and creating digital records of transactions.
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