Traders to reject UPI payments on October 2 in protest against MDR charge

Traders across the country are angry over the government's decision to impose an MDR charge on UPI payments, and shopkeepers in several cities have launched a protest against the tax. Large traders' bodies, the Federation of All India Vyapar Mandal (FAIVM) and the Confederation of All India Traders (CAIT), have announced the agitation. October 2, Gandhi Jayanti, has been declared No UPI Day, when traders will not accept UPI payments.

On October 2, no shop will accept UPI payments, and customers will have to pay only by cash or card that day.

Traders are protesting against the 0.4 percent Merchant Discount Rate, or MDR, charged on UPI payments. They say margins are already thin on petrol, diesel, groceries, electronics and foodgrains, and the new charge will add to their financial burden. The Indore Retail Garments Association has warned that if the decision is not withdrawn before October 15, it will throw its UPI QR code machines into the water.

Traders are angry over the government's MDR decision. On September 23, around 125 trader bodies in Madhya Pradesh cities including Bhopal, Indore, Jabalpur and Gwalior observed No UPI Day, affecting around 25 percent of business across the state. The Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA) and the petrol pump dealers' association have also extended strong support to the agitation.

MACCIA president Ravindra Mangave said No UPI Day will be observed on October 2. "We have spoken to trader bodies across the country, and not just Maharashtra but other states too have decided to observe No UPI Day," he said. He added that MACCIA and its 500 affiliated bodies plan to meet the chief minister to present their demands.

Mangave said other major bodies including the Federation of Retail Traders Welfare Association (FRTWA), the All India Consumer Products Distributors Federation (AICPDF), the All India Mobile Retailers Association (AIMRA), the All India Jewellers and Goldsmiths Federation (AIJGF) and the All India Edible Oil Traders Federation (AIEOTF) will also support the October 2 No UPI Day.

MDR is the processing charge levied on traders for accepting digital payments. When a customer pays by scanning a QR code or swiping a card, money moves from the customer's bank account to the trader's account through a digital network, and MDR covers the cost of building and securing this infrastructure.

Under the government's new decision, from October 15, a 0.40 percent charge will apply on peer-to-merchant (P2M) UPI transactions above Rs 2,000, capped at Rs 300. This means that whether a transaction is worth Rs 1 lakh or Rs 10 lakh, traders will not be charged more than Rs 300.