Trade Bodies Plan ‘No UPI Day’ On October 2 Over Proposed MDR On High-Value Payments

Several trader and business associations across India have reportedly decided to observe October 2 as a ‘No UPI Day’ to protest the proposed Merchant Discount Rate (MDR) on certain high-value Unified Payments Interface (UPI) transactions.

Under the new framework, a 0.4 per cent MDR is scheduled to apply from October 15 to eligible person-to-merchant (P2M) UPI transactions above ₹2,000. The charge will be capped at ₹300 for transactions of ₹75,000 and above.

As part of the proposed October 2 protest, traders will reportedly cover UPI QR codes, scanners, sound boxes and other payment devices with black cloth. The day coincides with Gandhi Jayanti.

Maharashtra Chamber Backs Nationwide Protest

The Maharashtra Chamber of Commerce, Industry & Agriculture (MACCIA) has reportedly called for October 2 to be observed as ‘No UPI Day’. MACCIA president Ravindra Mangave said trader associations from different parts of the country had been approached over the proposed protest.

Mangave reportedly said MACCIA and around 500 affiliated associations also plan to raise the issue with the Maharashtra government.

Several national-level trade organisations, including 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), have reportedly extended support to the protest.

What Is The New UPI MDR?

MDR is a fee charged within the merchant payment ecosystem for processing digital transactions. Under the new rules, eligible P2M UPI payments above ₹2,000 will attract an MDR of 0.4 per cent from October 15. Customers are not supposed to bear the MDR directly.

Transactions between individuals will remain outside the MDR framework. Small merchants meeting the prescribed eligibility criteria will also remain exempt, while certain essential sectors such as fuel, insurance, telecommunications and railways will have a separate flat MDR structure.

Traders Raise Concerns Over Additional Costs

AICPDF national president Dhairyashil Patil reportedly said retailers and distributors operate on narrow margins and argued that the additional payment-processing cost could increase their expenses.

All India Edible Oil Traders Federation national president Shankar Thakkar also reportedly said traders across the country were opposed to the proposed MDR and warned that further protests could be considered if their concerns were not addressed.

According to trade bodies, the increasing adoption of UPI has made transactions across the retail supply chain more transparent. A customer can pay a retailer digitally, while the retailer can subsequently pay a wholesaler and the wholesaler can transfer funds to manufacturers or suppliers electronically.

Traders have reportedly argued that imposing additional costs on businesses for using a traceable digital payment system could discourage some small retailers from relying on UPI.

UPI Handles Billions Of Transactions

UPI processed 15.51 billion P2M transactions worth ₹8.95 trillion in August, according to the data cited in reports. Payments above ₹2,000 accounted for around 67 per cent of the total value of P2M transactions.

The proposed MDR has also prompted discussions with other sectors. Senior officials from the Ministry of Petroleum and Natural Gas reportedly met representatives of the All India Petroleum Dealers Association over demands for an exemption from MDR.

Meanwhile, SEBI Chairman Tuhin Kanta Pandey has reportedly said that the regulator would examine concerns raised by stockbrokers regarding MDR on large UPI transactions in the capital-market segment. The capital-market MDR has been set at 0.02 per cent, subject to a ₹300 cap.

The proposed October 2 protest comes ahead of the October 15 implementation of the new MDR framework, with trade bodies reportedly seeking changes to the proposed structure.