Mobile Retailers Call for ‘No UPI Day’ on October 2 Over Proposed MDR Charges

The All India Mobile Retailers Association (AIMRA) has called for a nationwide ‘No UPI Day’ on October 2 to protest the proposed 0.4 per cent Merchant Discount Rate (MDR) on specified UPI merchant transactions above Rs 2,000.

As part of the protest, mobile retailers across the country will symbolically cover their UPI QR codes, sound boxes and payment scanners with black cloth and refrain from accepting UPI payments. The protest is planned on Gandhi Jayanti to highlight concerns over the impact of the proposed charges on small retailers.

AIMRA said the move was not against UPI or digital payments but against the additional financial burden that MDR could impose on businesses operating on thin margins.

According to a representation submitted to Finance Minister Nirmala Sitharaman, AIMRA estimates that a small retailer processing Rs 5 lakh to Rs 30 lakh in monthly UPI transactions could face an additional cost of around Rs 2,000 to Rs 12,000 per month. The association estimates the overall burden on small mobile retailers at around Rs 40 crore per month, or nearly Rs 500 crore annually.

The new MDR framework is scheduled to take effect from October 15. Under the framework, a 0.4 per cent MDR will apply to specified person-to-merchant (P2M) UPI transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 and above.

Person-to-person payments and P2M transactions up to Rs 2,000 will remain outside the MDR. The government has also said consumers will not directly pay the MDR, with the charge being shared among participants in the payment ecosystem. Certain essential sectors, including railways, telecom, insurance and fuel, will attract a flat Rs 5 MDR on eligible transactions.

The Supreme Court on September 28 declined to stay the new framework while seeking an explanation from the Centre on the basis for the charges.

AIMRA has urged the government, financial institutions and NPCI to reconsider the levy and retain a zero-MDR structure for UPI merchant payments.