Traders and business associations across India have announced a “No UPI Day” on October 2 to protest the 0.4 per cent merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions above ₹2,000 from October 15.   

They plan to cover UPI scanners, QR codes, sound boxes and other related devices with black cloth as a mark of protest on October 2, which is also observed as Gandhi Jayanti across the country. 

The Maharashtra Chamber Of Commerce, Industry & Agriculture (MACCIA) has called for October 2 to be observed

as ‘No UPI Day’, said Ravindra Mangave, president, MACCIA. 

“We have spoken to all trader associations in India and have decided to follow the No UPI Day, not only in Maharashtra but in other states as well,” he said, adding that MACCIA and its 500 affiliate associations plan to meet the chief minister and place their demands before him. 

“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 Akhil Bharatiya Khadya Tel Vyapari Mahasangh (khil Bharatiya Khadyatel Vyapari Mahasangh (All India Edible Oil Traders Federation or AIEOTF) are some of the important associations in the country who will support the No UPI Day on October 2,” said Mangave. 

An MDR is a fee paid by a merchant for accepting digital payments. Peer-to-peer (P2P) UPI transactions do not attract any fee. Peer-to-merchants (P2M) UPI transactions above ₹2,000 attract a 0.40 per cent fee, capped at ₹300. 

Payments to small vendors, classified as person-to-person-merchant (P2PM) transactions will also remain free of any MDR. P2PM covers small vendors receiving up to ₹1 lakh a month through UPI, a category that particularly benefits businesses in rural and semi-urban areas. 

In August alone, UPI processed 15.51 billion p2M transactions, worth a combined ₹8.95 trillion. Payments above ₹2,000 made up about 67 per cent of that value. 

Last week, senior officials from the Ministry of Petroleum and Natural Gas met the All India Petroleum Dealers Association (AIPDA) to discuss dealers’ demand for an exemption from MDR on UPI transactions. 

Securities and Exchange Board of India (Sebi) Chairperson Tuhin Kanta Pandey had said the regulator would look into concerns raised by stockbrokers over the new MDR for large fund transfers through UPI. The MDR for capital-market transactions has been set at 0.02 per cent, subject to a ₹300 cap, for payments to mutual funds, brokers and dealers, and investment advisers. 

Dhairyashil Patil, national president, AICPDF said,“Why should traders alone bear the additional cost of digital payments? Retailers and distributors operate on very thin margins and already contribute significantly to the growth of digital commerce. Imposing MDR on UPI transactions will only add another cost to their business. Digital payments should reduce friction, not penalise the trader.” 

All India Edible Oil Traders Federation National President Shankar Thakkar said there is strong opposition among traders across the country to the government’s proposed order to impose a 0.4 per cent MDR charge on UPI transactions above ₹2,000 from October 15. 

Various traders’ organisations across the country have decided to protest on Gandhi Jayanti (October 2) by following the path adopted by Mahatma Gandhi and covering UPI scanners, QR codes, sound boxes and other related devices with black cloth as a mark of protest. 

“If the government does not take an appropriate decision on this issue, a strategy for further agitation will be decided in the coming days, and the protest will be intensified further,” Thakkar said. 

He explained that the continuously increasing use of UPI payments has made the entire payment chain in retail trade more transparent. A customer makes a UPI payment to a retailer, the retailer makes a digital payment to the wholesaler while purchasing goods, and the wholesaler in turn makes an online payment to the manufacturer or supplier. This has reduced the circulation of cash and created a record of every transaction.