Ulhasnagar Traders Observe ‘No UPI Day’, Cover QR Codes With Black Cloth Over New MDR Charges

Ulhasnagar: The growing dependence on digital payments came under the spotlight in Ulhasnagar on Friday as traders observed a local ‘No UPI Day’ to protest the proposed 0.4% Merchant Discount Rate (MDR) on specified UPI transactions above ₹2,000. Several shopkeepers covered their UPI QR scanners with black cloth and stopped accepting digital payments, leaving many customers scrambling for cash to complete their purchases.

Protest Targets New MDR

The protest was organised under the banner of the Ulhasnagar Shopkeepers Association following the traders’ campaign against the new MDR framework. The move comes ahead of October 15, when the revised MDR structure is scheduled to take effect for specified person-to-merchant (P2M) UPI transactions above ₹2,000. Under the framework, the MDR is to be borne by merchants, with a cap applicable to high-value transactions.

Across several markets in Ulhasnagar, traders displayed their opposition by covering QR codes and UPI scanners with black cloth. The symbolic protest, however, had an immediate impact on customers, many of whom have increasingly shifted to digital payments and now carry little or no cash.

Shoppers Search For ATMs

Customers arriving for routine shopping were caught off guard when shopkeepers refused to accept UPI payments. Several shoppers said they had to abandon their purchases temporarily and search for nearby ATMs. Those who managed to withdraw cash could return and complete their transactions, while others had to postpone their shopping.

The protest drew mixed reactions from consumers. Some supported the traders, arguing that businesses had been encouraged for years to adopt digital payments and should not now be burdened with additional transaction costs. They demanded that the MDR framework be reconsidered.

Some Shoppers Criticise Protest

Others, however, criticised the decision to stop accepting UPI payments, saying customers should not be made to bear the inconvenience of a dispute between traders and the authorities. “Traders should raise their concerns with the government and financial institutions rather than putting customers in difficulty,” some shoppers said.

The issue has gained wider attention as the new MDR framework marks a shift from the long-standing zero-MDR model for UPI. The new structure provides for a 0.4% MDR on specified P2M transactions above ₹2,000, while certain categories and small merchants remain subject to exemptions or separate provisions. The government has also advised that the new merchant-side charge should not be passed on directly to customers.

Ulhasnagar Shopkeepers Association president Deepak Chhatlani said traders were opposing the proposed charge because it could add to their operating costs and affect already narrow margins. He urged the authorities to reconsider the decision and retain a zero-MDR regime for UPI transactions.

While the traders’ protest highlighted concerns over the cost of maintaining India’s rapidly expanding digital payment ecosystem, Friday’s developments also exposed the growing dependence of everyday consumers on cashless payments. For many shoppers in Ulhasnagar, the blacked-out QR scanners translated into an unexpected return to cash — and a trip to the nearest ATM.

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