Traders withdraw October 2 ‘No UPI Day’ call after meeting finance minister

The proposed ‘No UPI Day’ protest planned by mobile retailers and consumer product distributors on October 2 has been called off after a trade delegation met Finance Minister Nirmala Sitharaman and raised concerns over the proposed Merchant Discount Rate (MDR) on certain UPI transactions.

The All India Mobile Retailers Association (AIMRA) and All India Consumer Products Distributors Federation (AICPDF) had announced the protest against the proposed 0.4% MDR on UPI transactions above ₹2,000, arguing that the charge could add to the cost burden for small retailers.

Following the meeting with the Finance Minister, the two associations decided to withdraw the planned protest, according to a statement issued by the trade bodies.

What retailers have proposed on UPI MDR

The delegation, led by BJP MP and CAIT secretary general Praveen Khandelwal and AIMRA founder chairman Kailash Lakhyani, submitted a joint representation seeking changes to the proposed MDR framework.

One of the key demands was that the 0.4% MDR should not be introduced immediately. Instead, the trade bodies proposed a phased approach, starting with an MDR of 0.2% in 2026-27 and increasing it by 0.05 percentage points every year until it reaches 0.4%.

The associations have also sought a higher transaction threshold for the levy.

Retailers seek ₹5 lakh threshold instead of ₹1 lakh

The trade bodies have proposed increasing the threshold for MDR applicability from ₹1 lakh to ₹5 lakh.

According to the associations, a higher threshold would better reflect the transaction patterns of merchants and reduce the impact of the proposed charge on smaller businesses.

Another demand is to keep merchant-to-merchant (M2M) UPI transactions outside the MDR framework.

Why the ‘No UPI Day’ protest was planned

AIMRA had earlier said that the proposed MDR could put pressure on the margins of micro, small and medium enterprises, shopkeepers and independent retailers.

The associations have argued that retailers increasingly rely on digital payments for their day-to-day transactions and that an additional transaction cost could affect businesses operating on relatively thin margins.

The delegation has also sought the formation of an expert committee to examine the concerns of the retail and distribution sector.

What happens next on UPI MDR

The protest has been withdrawn after Sitharaman heard the trade bodies’ concerns and assured the delegation that the issues raised would be considered and addressed.

For merchants, the key points under discussion are therefore the rate of MDR, the pace of its implementation, the transaction threshold and whether M2M payments should be covered.

(Edited by : Anshul)