Mobile phone dealers across the nation have decided to stop accepting UPI payments on October 2 as part of a nationwide protest against the proposed 0.4 per cent ) on certain merchant transactions, news agency PTI reported.
The protest, organised by the All India Mobile Retailers Association (AIMRA), will see retailers mark Gandhi Jayanti as “No UPI Day” to raise concerns over the additional cost of accepting digital payments.
A 0.4 per cent fee will be levied on UPI transactions of more than ₹2,000 made to merchants from October 15. Transactions between individuals will not attract the charge, while small-value merchant payments will also remain exempt.
AIMRA Vice President and Delhi-NCR President Tarvinder Singh said the association had chosen October 2 for the protest to draw attention to the concerns of mobile retailers.
“The All India Mobile Retailers Association (AIMRA) has called for a ‘NO UPI DAY’ on , to highlight the concerns of mobile retailers regarding the 0.4 per cent Merchant Discount Rate (MDR) applicable to eligible merchant UPI transactions,” Singh was quoted as saying by news agency PTI.
Retailers participating in the campaign will temporarily stop accepting UPI payments on October 2. They will also cover their UPI QR codes with black cloth to mark their opposition to the proposed MDR.
The association has separately written to Finance Minister Nirmala Sitharaman, warning that the proposed charge could put additional pressure on the earnings of small retailers.
Based on AIMRA’s calculations, a retailer handling UPI transactions worth ₹5 lakh every month could face an additional cost of around ₹2,000. For retailers processing up to ₹30 lakh through UPI each month, the monthly impact could rise to ₹12,000.
The association has argued that such costs could take away a sizeable share of the earnings of smaller mobile retailers.
AIMRA has called for merchant UPI payments to continue under the existing zero-MDR structure. Singh said the association’s campaign should not be viewed as opposition to UPI or the government’s digital payments push.
“If We Want Digital India, UPI Must Remain Zero MDR. This is not a protest against UPI or Digital India. Our concern is the additional financial burden being placed on merchants who accept digital payments. If we want Digital India to grow further, digital payments should remain affordable for the entire retail ecosystem. Our clear demand is that UPI merchant payments should continue under a Zero MDR structure,” Singh was quoted as saying by PTI.
The new MDR framework has faced a legal challenge, with the Supreme Court scheduled to hear the plea on Monday.
The public interest litigation (PIL), filed by advocate Anjan Datta, alleges that the levy was introduced without adequate statutory safeguards, transparency or public consultation.
Under the new framework, 40 per cent of MDR collections will go to customers’ banks, 30 per cent to payment gateways, 20 per cent to the UPI app and the remaining 10 per cent to the sponsoring bank of the UPI app.
The revenue-sharing structure is different because UPI transactions have historically operated without a conventional merchant fee. The new model is intended to provide a financial framework for sustaining and expanding the payments infrastructure.
Sitharaman said the government would not receive the money collected through MDR.
“This is not a tax, this is not a cess, this is not even a surcharge. And the collection is not coming to the Consolidated Fund of India.”
The government has said MDR is a charge within the payment ecosystem rather than a government levy, with the proceeds distributed among participating financial institutions and payment service providers.
(With inputs from news agency PTI)
