- Traders withdrew UPI protest after Finance Minister’s assurances.
- The protest opposed 0.4% MDR on UPI transactions.
- They sought MDR deferment, phased rollout, higher threshold.
Traders’ bodies have called off their proposed “No UPI Day” protest scheduled for October 2, following a meeting with Union Finance Minister Nirmala Sitharaman on Wednesday, PTI reported citing officials.
The All India Mobile Retailers Association (AIMRA) and All India Consumer Products Distributors Federation (AICPDF) said in a statement on Wednesday that the protest had been withdrawn.
The protest was announced against the Centre’s proposed 0.4% Merchant Discount Rate (MDR) on UPI transactions above ₹2,000, which is set to come into effect from October 15. The associations had said the charge would put an additional burden on small retailers.
As part of the proposed protest, retailers across the country were to cover their UPI QR codes, sound boxes and payment scanners with black cloth to symbolically register their opposition to the MDR charge.
What Traders Sought From Government
A trade delegation led by BJP MP and Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal and AIMRA founder chairman Kailash Lakhyani submitted a joint representation to the Finance Minister.
The delegation sought deferment of the proposed MDR, along with a phased implementation and changes to the threshold for its applicability.
The traders also sought,
- Exemption of merchant-to-merchant (M2M) transactions from MDR.
- Constitution of an expert committee to examine concerns of the retail and distribution sector.
The delegation proposed that instead of introducing an immediate 0.40% MDR, the charge be introduced at 0.20% in FY2026-27 and increased by 0.05 percentage points annually until it reaches 0.40%.
Trade bodies also sought raising the proposed Rs 1 lakh threshold for MDR applicability to Rs 5 lakh, saying this would take into account the transaction patterns of merchants.
Sitharaman Assures Traders
PTI reported that Sitharaman heard the concerns raised by the traders and assured the delegation that the issues would be duly considered and addressed.
Following the assurances, AIMRA and AICPDF decided to withdraw their protest, the associations said in the release.
AIMRA had earlier said the proposed MDR would affect the “already thin” profit margins of micro, small and medium enterprises (MSMEs), shopkeepers and independent retailers, who rely on digital payments for day-to-day transactions.
What Changes Under New UPI MDR Framework?
The National Payments Corporation of India (NPCI) announced on September 15 that MDR would apply to select UPI transactions, while stating that there would be “no impact on any person-to-person transactions”.
Under the framework, a 0.4% MDR will apply from October 15 to Person-to-Merchant (P2M) UPI transactions above Rs 2,000. The charge will be capped at Rs 300 per transaction for transactions of Rs 75,000 and above.
The Finance Ministry has said UPI will continue to remain completely free for all P2P transactions, irrespective of the amount transferred. It said about “70% of the total transaction value will remain completely outside the MDR framework” and close to 96% of merchant transactions will remain free.
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