The proposed “No UPI Day” protest scheduled for October 2 has been withdrawn by the trade organisations that had announced the action, following a meeting with Union Finance Minister Nirmala Sitharaman.
The protest had been planned in response to the proposed 0.4% Merchant Discount Rate (MDR) on certain UPI payments made to merchants above ₹2,000.
Why Was ‘No UPI Day’ Announced?
- The All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF) had supported the proposed October 2 protest.
- Trader groups raised concerns that the proposed MDR could increase costs for retailers, particularly businesses operating with relatively low profit margins.
- Some associations had planned to symbolically cover UPI QR codes, scanners and sound boxes with black cloth and encourage cash transactions on October 2.
Protest Withdrawn After Meeting Finance Minister
- A delegation of trade representatives met Finance Minister Nirmala Sitharaman in New Delhi on September 30.
- Following the meeting, the organisations withdrew the October 2 “No UPI Day” call. The government said it remains committed to promoting digital transactions while also considering concerns raised by stakeholders.
- The trade representatives also reiterated their support for UPI and India’s broader digital payments ecosystem.
What Is the Proposed 0.4% UPI MDR?
- Under the proposed framework, a 0.4% MDR is scheduled to apply from October 15, 2026, to specified person to merchant UPI transactions above ₹2,000.
- MDR is a charge associated with accepting certain merchant payments. It is not a direct UPI transaction fee charged to consumers.
- UPI payments between individuals are outside this merchant MDR framework.
- For eligible merchant transactions, the MDR is capped at ₹300 for transactions of ₹75,000 or more, according to the reported framework.
Will Customers Have to Pay the 0.4%?
- At present, the announced MDR is a merchant-side charge rather than a fee directly imposed on customers.
- However, traders have raised concerns about the possible indirect impact if businesses attempt to recover additional payment costs through pricing or other charges.
- The actual impact on customers will depend on how merchants and the payments ecosystem respond to the new framework.
Traders Seek Changes to the Framework
- During discussions with the government, trade representatives reportedly sought changes to the proposed system, including deferment during the festive season, a review of the transaction threshold and consideration of a higher threshold for certain businesses.
- The associations also raised concerns regarding merchant to merchant transactions and requested further examination of the issue.
Important Clarification About ‘No UPI Day’
- The October 2 protest should not be described as a nationwide shutdown of UPI.
- The Confederation of All India Traders (CAIT) had previously stated that it did not call for or endorse a nationwide “No UPI Day”, saying that some other trade organisations and regional bodies had independently announced such programmes.
- With the latest withdrawal announced by the organisations involved, the proposed October 2 protest will not go ahead in the form previously announced.
What Happens From October 15?
- The proposed 0.4% MDR framework is scheduled to take effect on October 15, unless there is a subsequent change by the authorities or through legal proceedings.
- For customers, ordinary UPI usage is expected to continue, while eligible merchant transactions above ₹2,000 would be affected by the new MDR framework.
