Mobile Retailers To Halt UPI Payments On October 2 Over Proposed MDR

• 29 Sep 2026
• TM Team
• 0 Comments

Mobile phone retailers across India will observe October 2 as “No UPI Day” to protest the proposed Merchant Discount Rate (MDR) on eligible Unified Payments Interface (UPI) merchant transactions above Rs 2,000, the All India Mobile Retailers Association (AIMRA) said.

Retailers participating in the protest plan to temporarily stop accepting UPI payments and cover their UPI QR codes with black cloth on Gandhi Jayanti. The association said the action is aimed at highlighting concerns over the additional cost that the new MDR framework could impose on merchants.

AIMRA has opposed the proposed 0.4 per cent MDR for eligible merchant UPI transactions above Rs 2,000. The association has told the government that the charge could increase costs for small mobile retailers that rely heavily on UPI for customer payments.

According to AIMRA’s representation to Finance Minister Nirmala Sitharaman, a retailer processing Rs 5 lakh to Rs 30 lakh in monthly UPI transactions could face an estimated additional cost of Rs 2,000 to Rs 12,000 a month. The association has estimated the total impact on small mobile retailers at around Rs 40 crore a month, or nearly Rs 500 crore annually. These figures are estimates provided by AIMRA.

AIMRA Vice President and Delhi-NCR President Tarvinder Singh said the protest was not against UPI or digital payments, but against the additional financial burden on merchants. The association has called for merchant UPI payments to continue under a zero-MDR structure.

The new MDR framework is scheduled to take effect from October 15. It provides for a 0.4 per cent MDR on eligible UPI merchant transactions above Rs 2,000, while person-to-person transactions and specified small-value merchant payments remain outside the charge framework.

The MDR will be capped at Rs 300 for transactions of Rs 75,000 and above. The framework also provides separate rates for certain sectors, including a flat Rs 5 charge for eligible transactions above Rs 2,000 in specified essential and thin-margin categories. Capital-market transactions involving mutual funds, securities, stockbrokers and dealers will attract an MDR of 0.02 per cent, also capped at Rs 300.

The Centre has said MDR is a charge within the payments ecosystem rather than a government levy and that consumers will not be required to bear the charge. The framework is also facing a legal challenge before the Supreme Court.