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The debate over proposed charges on high-value UPI transactions has intensified, with traders in Indore observing a “No UPI Day” on Wednesday to protest the upcoming Merchant Discount
Rate (MDR) on select transactions above INR 2,000. More than 100 trader organisations have
backed the protest, with participants planning to stop accepting UPI payments and cover QR-
code scanners as a symbolic demonstration.
The protest comes ahead of the October 15 implementation of the new UPI merchant-fee framework. Under the framework, eligible person-to-merchant (P2M) UPI transactions above INR 2,000 will attract an MDR of 0.4%, subject to a maximum of INR 300 per transaction. The charge is levied on merchants rather than consumers.
Trader organisations have raised concerns that the additional payment-processing cost could affect businesses, particularly those operating on thin margins. Indore's Ahilya Chamber of Commerce, which represents more than 125 trade organisations, has called for the September 23 protest.
The development comes a day after the National Payments Corporation of India (NPCI) clarified that the new MDR structure would not affect most UPI merchant transactions. NPCI said transactions of up to INR 2,000 will continue to carry zero MDR and that more than 96% of UPI merchant transactions by volume fall within this threshold.
NPCI also said merchants receiving up to INR 1 lakh per month through UPI will not be liable to pay MDR. For merchants who do fall under the MDR framework, NPCI said the GST paid on the merchant fee can be adjusted through input tax credit against GST payable on sales.
The new framework has therefore created a divide between concerns raised by sections of the merchant community and NPCI's position that the impact will remain limited. While traders are protesting the proposed charges, consumers will continue to make UPI payments without directly paying the MDR.
With the October 15 rollout approaching, the focus is now shifting to how merchants, payment companies, and customers respond to the new fee structure and whether the protests spread beyond Indore.
The protest comes ahead of the October 15 implementation of the new UPI merchant-fee framework. Under the framework, eligible person-to-merchant (P2M) UPI transactions above INR 2,000 will attract an MDR of 0.4%, subject to a maximum of INR 300 per transaction. The charge is levied on merchants rather than consumers.
Trader organisations have raised concerns that the additional payment-processing cost could affect businesses, particularly those operating on thin margins. Indore's Ahilya Chamber of Commerce, which represents more than 125 trade organisations, has called for the September 23 protest.
The development comes a day after the National Payments Corporation of India (NPCI) clarified that the new MDR structure would not affect most UPI merchant transactions. NPCI said transactions of up to INR 2,000 will continue to carry zero MDR and that more than 96% of UPI merchant transactions by volume fall within this threshold.
NPCI also said merchants receiving up to INR 1 lakh per month through UPI will not be liable to pay MDR. For merchants who do fall under the MDR framework, NPCI said the GST paid on the merchant fee can be adjusted through input tax credit against GST payable on sales.
The new framework has therefore created a divide between concerns raised by sections of the merchant community and NPCI's position that the impact will remain limited. While traders are protesting the proposed charges, consumers will continue to make UPI payments without directly paying the MDR.
With the October 15 rollout approaching, the focus is now shifting to how merchants, payment companies, and customers respond to the new fee structure and whether the protests spread beyond Indore.
