There is anger among the traders against the new Merchant Discount Rate (MDR) to be implemented from October 15, and this is the reason why a call has now been made to celebrate 'No UPI Day' on October 2.
Nationwide call for No UPI Day
Traders in various parts of the country have begun protesting against UPI charges. Major trade organizations like the Federation of All India Vyapar Mandal (FAIVM) and the Confederation of All India Traders (CAIT) have now declared a "No UPI Day" on Gandhi Jayanti, October 2nd. This means that merchants will not accept UPI payments on October 2nd, and the public will be required to purchase goods using cash or cards.
What are the businessmen against?
Businesses are protesting the 0.4% Merchant Discount Rate (MDR) fee imposed on UPI transactions. They say margins on petrol, diesel, groceries, electronics, and grains are already very low. The new tax will add to the financial burden. The Indore Retail Garments Association has already warned that if this decision is not reversed before October 15th, they will destroy UPI QR code machines.
Businesses are so outraged by this government decision that on September 23rd, nearly 125 business organizations in Madhya Pradesh cities like Bhopal, Indore, Jabalpur, and Gwalior already observed "No UPI Day." This affected approximately 25% of businesses across the state. The Maharashtra Chamber of Commerce (MACCIA) and the Petrol Pump Dealers Association are also strongly supporting this movement.
Businesses came out in support of 'No UPI Day'
According to a Business Standard report, Ravindra Mangwe, president of MACCIA (Maharashtra Chamber of Commerce, Industry and Agriculture), said that October 2nd will be observed as 'No UPI Day.' He said, "We have spoken to all trade organizations across the country, and not only Maharashtra, but other states have also decided to observe 'No UPI Day.'" He also stated that MACCIA and its 500 affiliated organizations plan to meet with the Chief Minister to present their demands.
Mangwe said, "Federation of Retail Traders Welfare Association (FRTWA), All India Consumer Products Distributors Federation (AICPDF), All India Mobile Retailers Association (AIMRA), All India Jewellers and Goldsmiths Federation (AIJGF) and All India Edible Oil Traders Federation (AIEOTF) are some of the important organisations in the country which will support 'No UPI Day' on October 2."
What is MDR over which there is a ruckus?
MDR is a processing fee charged by merchants for accepting digital payments. When you make a payment at a store by scanning a QR code or swiping your card, an entire digital network (banks, payment gateways, Visa/Mastercard/NPCI) works to securely transfer the money from the customer's bank account to the merchant's. MDR is the cost of developing and maintaining the security of this digital infrastructure.
Under the government's new decision, starting October 15th, peer-to-merchant (P2M) UPI transactions exceeding ₹2,000 will be subject to a 0.40% fee, capped at ₹300. This essentially means that whether the transaction is for ₹1 lakh or ₹1 million, merchants will not be charged a fee exceeding ₹300. The tax amount will be frozen at ₹300.
