The move came after representatives of 20 trade associations met FM Nirmala Sitharaman to raise concerns related to the likely impact of the UPI MDR on small businesses
While the retailers and distributors have called off their protest, it will be interesting to see whether the Centre gives in to the demands of the protestors
The industry bodies sought deferment of the proposed MDR ahead of the festive season and to keep merchant-to-merchant transactions outside the ambit of the proposed regime
The All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF) have called off their “No UPI Day” protest, which was earlier scheduled for October 2.
The move came after representatives of 20 trade associations met finance minister (FM) Nirmala Sitharaman to raise concerns related to the likely impact of the UPI merchant discount rate (MDR) on small and medium businesses.
The delegation was led by Praveen Khandelwal, who is a BJP member of Parliament (MP) from Chandni Chowk and secretary general of the Confederation of All India Traders (CAIT).
“More than 20 organisations, including AIMRA and AICPDF, expressed their concerns. The finance minister assured that all issues would be considered with utmost seriousness. Accordingly, the call for the proposed ‘No UPI Day’ on October 2 has been withdrawn,” said Khandelwal while briefing the media after meeting the FM.
According to Economic Times, the two industry bodies sought deferment of the proposed MDR ahead of the upcoming festive season and heightened business activity. They also reportedly called for keeping merchant-to-merchant transactions outside the ambit of the proposed regime.
As per the report, the trade associations also called for increasing the ₹1 Lakh monthly receipt limit for merchant exemptions to ₹5 Lakh.
Meanwhile, Khandelwal also said, “Dialogue between the government and traders’ organizations on all essential issues, including cybersecurity, will continue moving forward”.
The development comes days after AIMRA and AICPDF called for a nationwide protest against the proposed UPI MDR on October 2. At the time, the latter had said that its network of around 4.5 Lakh distributors and 1.3 Cr retailers will participate in the protest.
At the heart of the row is the MDR debate, which gained momentum earlier this month after the finance ministry allowed a 0.4% MDR on specified P2M UPI transactions above ₹2,000, capped at ₹300 for transactions of ₹75,000 and above. It is set to come into effect from October 15.
The move marked a major shift from the zero-MDR regime, which was implemented almost seven years to spur UPI payments. However, banks, payment aggregators and third party application providers (TPAP) have lauded as the framework unlocks a new revenue stream for companies operating in the UPI ecosystem.
However, the proposed charges have triggered a wider debate over their impact on merchants, businesses and consumers. Retailer groups have warned that the MDR could discourage UPI acceptance, particularly as festive-season transactions often exceed ₹2,000.
Fuel dealer associations have also sought government intervention over higher payment processing costs. Meanwhile, brokers and investment platforms such as Zerodha and INDmoney have raised concerns about charges on transactions that may not generate corresponding trading revenue.
Shortly after the proposal was introduced, a petition was filed in the Supreme Court (SC), challenging the framework. The plea argued that merchants could indirectly pass on the cost to consumers through higher prices.
However, the SC later temporarily refused to stay the new MDR framework, but has sought responses from the Centre, the RBI and the NPCI on the petition.