No UPI Day On October 2: Traders Plan Nationwide Protest Against 0.4% MDR

The move comes ahead of the new MDR regime, under which merchants will have to pay a 0.4 per cent charge on eligible UPI payments above Rs 2,000 from October 15.

Officials from the petroleum ministry met the All India Petroleum Dealers Association (AIPDA) to discuss demands for an exemption from the levy.

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Key points generated by AI, verified by newsroom

• Trade bodies plan 'No UPI Day' opposing proposed MDR.
• Merchants face 0.4% MDR on high-value UPI payments.
• Traders argue MDR adds cost, affecting businesses' narrow margins.

Trade bodies across India are preparing to observe October 2 as ‘No UPI Day’, stepping up their opposition to the proposed merchant discount rate (MDR) on certain high-value UPI transactions. The protest is planned for Gandhi Jayanti, with traders proposing to cover UPI scanners, QR codes, sound boxes and other related devices with black cloth.

The move comes ahead of the new MDR regime, under which merchants will have to pay a 0.4 per cent charge on eligible UPI payments above Rs 2,000 from October 15, reported Business Standard.

Why Traders Are Planning ‘No UPI Day’

The Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA) has announced the October 2 campaign and said trader associations in several parts of the country are expected to participate.

Ravindra Mangave, president of MACCIA, said the chamber had discussed the issue with trader associations across India. MACCIA, along with around 500 affiliated associations, also plans to meet the Maharashtra chief minister to put forward its 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 Goldsmiths Federation (AIJGF) and All India Electronics and Home Appliances Retailers Federation (AIEOTF) are among the bodies backing the protest.

What Is The New UPI MDR Rule?

Under the proposed framework, merchants will pay an MDR of 0.40 per cent on eligible person-to-merchant UPI transactions above Rs 2,000, with the charge capped at Rs 300.

The levy will apply to the merchant rather than the customer. Person-to-person UPI payments will continue to remain free.

Small vendors receiving up to Rs 1 lakh a month through UPI will also remain exempt from MDR on individual transactions above Rs 2,000. The exemption is aimed particularly at smaller businesses in rural and semi-urban areas.

Traders, however, argue that even a small charge can add to costs for businesses operating on narrow margins.

Traders Say UPI Has Already Changed The Payment Chain

A key argument being raised by the trade bodies is that UPI has made business payments more transparent by reducing dependence on cash.

Dhairyashil Patil, national president of AICPDF, said traders should not be made to bear an additional cost when many businesses operate with limited margins. According to him, digital payments were intended to make transactions easier rather than impose an additional financial burden on merchants.

Shankar Thakkar, national president of AIEOTF, also highlighted the wider impact of UPI on the retail and distribution ecosystem.

He said UPI has made the payment chain more transparent, covering transactions between customers, retailers, wholesalers and manufacturers or suppliers. It has also reduced cash usage while creating a transaction record.

“Is the cost of making the system more transparent being imposed on small retailers? Imposing MDR on traders operating on thin margins would, in effect, amount not to promoting Digital India, but to economically penalising honest businesses for conducting recorded and transparent transactions.”

High-Value UPI Payments Account For Large Share Of Transaction Value

The scale of merchant payments is another factor behind the traders’ concerns.

In August, UPI processed 15.51 billion person-to-merchant transactions worth Rs 8.95 trillion. Transactions above Rs 2,000 accounted for around 67 per cent of the total transaction value during the month.

This means the MDR proposal could affect a significant portion of the value handled through UPI, even though the number of transactions covered would be smaller than the overall UPI transaction count.

Sector-Specific Concerns Also Emerge

The proposed MDR has also prompted discussions in specific sectors.

Officials from the petroleum ministry met the All India Petroleum Dealers Association (AIPDA) to discuss demands for an exemption from the levy.

The securities market has also raised concerns. SEBI Chairman Tuhin Kanta Pandey said the regulator would look into concerns raised by stockbrokers.

For capital-market transactions, the proposed MDR is 0.02 per cent, capped at Rs 300, covering categories such as mutual funds, brokers and dealers, and investment advisers.

Traders Signal Further Action If Concerns Remain

The October 2 campaign is being positioned as an initial protest against the proposed MDR.

Thakkar said traders would continue to oppose the charge and indicated that further agitation could follow if the government does not take an appropriate decision.