Retail bodies push back on proposed UPI MDR, citing festive-season cash shift risk
Retail, distributor, apparel and fuel-dealer associations are seeking higher zero-MDR thresholds and exemptions for thin-margin merchants as a 0.4% UPI charge above Rs 2,000 is set to take effect from October 15.
What happened
Retailers Association of India (RAI) · Indian retailer, distributor, apparel and fuel-dealer bodies oppose planned UPI MDR above Rs 2,000, warning it could
Key facts
- 0.4% MDR on UPI person-to-merchant transactions above Rs 2,000
- MDR capped at Rs 300 for transactions of Rs 75,000 and above
- Rs 1 lakh monthly UPI collection threshold for zero-MDR protection
- Rs 12 lakh annual digital receipts
- More than 90 million micro enterprises
What changed
Indian retailer, distributor, apparel and fuel-dealer bodies oppose planned UPI MDR above Rs 2,000, warning it could shift festive-season payments back to cash. They seek higher zero-MDR thresholds and exemptions for thin-margin merchants, while the government rules out rollback.
Why this matters
Prepare for potential festive-season payment-mix disruption by modeling the impact of a 0.4% UPI MDR on transactions above Rs 2,000 and reviewing surcharge, threshold, and acceptance policies for thin-margin categories.
What to watch
- Official notification confirming, delaying or modifying the October 15 effective date.
- Any increase in the Rs 2,000 zero-MDR threshold or exemptions for MSMEs, fuel, groceries, agriculture-linked trade or essential goods.
- NPCI, RBI or Finance Ministry clarification on whether merchants may surcharge customers for UPI payments.
- Festive-season UPI average ticket size, value growth and share of transactions above Rs 2,000.
- Reports of cash-discounting, UPI transaction splitting or merchant refusal for higher-ticket UPI payments.