Traders across the country have been urged to observe October 2 as a “No UPI Day” to press for the withdrawal of the proposed Merchant Discount Rate (MDR) on specified high-value UPI transactions.
MDR Capped At ₹300 For Larger Transactions
The campaign has been launched ahead of the October 15 rollout of a 0.4% MDR on specified person-to-merchant UPI payments above Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above. Small merchants meeting the prescribed exemption criteria will not be liable to pay the MDR.
Viren Shah, president of the Federation of Retail Traders Welfare Association (FRTWA), which represents around 6 lakh retailers in Mumbai, said the campaign was aimed at demonstrating solidarity among traders.
He said shopkeepers and business establishments had been asked to display “No UPI Day” posters at their entrances, cash counters and showcases, and share photographs of themselves with the posters to register their participation.
Retailers Fear Future Increase In Transaction Charges
“It is a fee on transactions. It will operate like credit card charges and while it is 0.4% today, there is no guarantee that it will not become 0.75% or more,” Shah said.
He added that the move could encourage some businesses to accept cash for higher-value purchases, contrary to the broader push towards digital payments.
Shah said India has an estimated 30-40 lakh small retailers and claimed that trader organisations across states were joining the campaign.
RAI Opposes MDR But Stays Away From Protest
The Retail Association of India (RAI), which represents organised retail, is opposed to MDR but will not participate in the October 2 protest, said Gautam Jain, director, finance and advocacy, RAI.
The Confederation of All India Traders (CAIT), meanwhile, has supported the introduction of MDR, arguing that the UPI ecosystem requires greater financial resources, including for infrastructure and cybersecurity.
The government and payment authorities have said the new MDR framework is intended to make the UPI ecosystem more financially sustainable and strengthen its infrastructure and security. Consumers will not be directly charged the MDR.
The proposed charges have nevertheless triggered concerns among sections of the trading community over the impact on already thin margins and the possibility of businesses shifting customers towards cash for larger transactions.
Organisers of the October 2 campaign said their objective was to strengthen the demand for zero MDR on UPI transactions and highlight the concerns of businesses over transaction-related costs.
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