Traders and business associations across India have called for a nationwide ‘No UPI Day’ on October 2 to protest the proposed Merchant Discount Rate (MDR) on certain high-value UPI transactions.
The protest is planned ahead of the proposed implementation of a 0.4 per cent MDR on eligible person-to-merchant (P2M) UPI transactions above Rs 2,000 from October 15. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above. Consumers will not directly pay the MDR.
What will happen to UPI QR codes?
As part of the October 2 protest, participating traders are expected to cover their UPI QR codes, scanners and sound boxes with black cloth and temporarily stop accepting UPI payments. Customers may instead be asked to make payments in cash or through another available method.
However, the protest does not mean that UPI itself will stop working. The action is being organised by participating traders and is aimed at protesting the proposed merchant charge.
Several trade bodies, including the Federation of Retail Traders Welfare Association, All India Consumer Products Distributors Federation, All India Mobile Retailers Association and All India Jewellers and Goldsmith Federation, have announced support for the October 2 campaign.
Why are traders protesting?
Trader organisations have raised concerns that the MDR could increase costs for retailers and distributors, particularly businesses operating on thin margins. They argue that the additional cost could also encourage some businesses to prefer cash payments for higher-value purchases.
The protest will coincide with Gandhi Jayanti on October 2, with some trade bodies describing the action as a symbolic form of protest. Participating traders have also indicated that further demonstrations could follow if their concerns are not addressed.
Will customers have to pay a UPI fee?
Under the proposed framework, the 0.4 per cent MDR is a merchant-side charge, not a direct fee on consumers. It applies to eligible P2M UPI transactions above Rs 2,000, while the framework provides exemptions for qualifying small merchants.
The proposed MDR has nevertheless triggered a debate among businesses and industry bodies. While several trader associations are opposing the charge, the Confederation of All India Traders has supported the MDR, arguing that the UPI ecosystem requires financial resources for infrastructure and cybersecurity.
So, on October 2, UPI will not shut down nationwide. Instead, participating shops may temporarily refuse UPI payments and cover their QR codes as part of the traders’ protest. The proposed MDR framework is scheduled to take effect from October 15.