Mobile Retailers to Protest on October 2, Demand Zero MDR for UPI Transactions

Mobile phone retailers across India are set to observe October 2 as a “No UPI Day” in protest against the government’s proposed 0.4% Merchant Discount Rate (MDR) on UPI transactions exceeding Rs 2,000. The All India Mobile Retailers Association (AIMRA) has organized this protest, during which retailers will cover their UPI QR codes with black cloth and refrain from accepting UPI payments on Gandhi Jayanti. AIMRA officials express concerns that the new MDR could impose significant costs on mobile retailers.

Retailers flag impact on margins

AIMRA has submitted a representation to Finance Minister Nirmala Sitharaman, stating that the 0.4% MDR could lead to monthly net losses ranging from Rs 2,000 to Rs 12,000 for small retailers processing between Rs 5 lakh and Rs 30 lakh through UPI each month. The association estimates that this charge could burden small mobile retailers with approximately Rs 40 crore monthly and nearly Rs 500 crore annually. AIMRA vice president Tarvinder Singh clarified that the protest is not against UPI or digital payments but against the additional costs imposed on merchants.

0.4% MDR to apply from October 15

The government plans to implement the 0.4% MDR on UPI transfers above Rs 2,000 starting October 15. Person-to-person transactions and small payments will remain exempt from this charge. The MDR will be capped at Rs 300 for transactions of Rs 75,000 and above. Essential sectors, including railways and telecom, will incur a flat MDR of Rs 5 per transaction above Rs 2,000. Meanwhile, person-to-person UPI transactions, which constitute a significant portion of transaction volume and value, will continue to attract zero charges.

Government says consumers will not bear MDR

The Centre has stated that the MDR is not a government charge and consumers will not be required to pay it. Sitharaman emphasized that the charge will be borne by merchants, banks, and other participants in the payment ecosystem, not by consumers. The Indian Banks’ Association is expected to establish a mechanism to ensure that merchants do not pass the charge onto customers, while the finance ministry plans to engage with merchants and the Confederation of All India Traders regarding concerns about the new framework.

Supreme Court to hear challenge

The new MDR framework is facing a legal challenge, with the Supreme Court set to hear a plea contesting the government’s decision to impose the charge on specified UPI transactions above Rs 2,000. The petition argues that the levy was introduced without adequate safeguards or public consultation and questions the distinction between UPI transactions and RuPay debit card payments. The plea seeks to quash or suspend the MDR framework for UPI transactions above Rs 2,000, or alternatively, to reconsider it after proper consultation and impact assessment.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn