A protest against the introduction of the MDR commission for UPI payments is being observed in various parts of the country. The government states that this will not place an additional burden on ordinary citizens. The MDR commission of 0.40 percent will only apply to large transactions exceeding ₹2000 and will fall upon large sellers. For example, for a transaction of ₹3000, the MDR commission for the seller will be ₹12.
However, this government decision is facing objections in several regions of the country, and some people are confused about the MDR rules. In this regard, the Madhya Pradesh Fuel Station Vendors Association has announced that starting October 16, they will not accept UPI payments for the purchase of gasoline or diesel fuel exceeding ₹2000. Only cash payments will be accepted in such cases.
The Chairman of the Madhya Pradesh Fuel Station Vendors Association, Ajay Singh, issued a statement according to which the organization's members decided to refuse UPI payments over ₹2000 if the government does not repeal MDR. According to him, under the new system, every fuel station vendor will incur losses of about ₹17,700 monthly, which cannot be compensated given the already low margin.
It should be noted that the 0.4 percent MDR commission for UPI payments exceeding ₹2000 will come into effect on October 15. This commission must be paid by the seller, not the customer. Furthermore, a fixed MDR fee of ₹5 will be charged for the purchase of gasoline, diesel fuel, or CNG exceeding ₹2000, which has caused dissatisfaction among vendors.
For essential services such as train tickets, gas stations, insurance, and telecommunications, a fixed MDR of ₹5 has been set instead of a percentage rate. This means that when paying via UPI any amount over ₹2000 (whether it is ₹2500 for gasoline or ₹50,000 for an insurance policy), the seller will bear a fixed fee of ₹5.
A maximum MDR limit of ₹300 has been set for large traders for payments of ₹75,000 and above. Regardless of whether the transaction is ₹100,000 or ₹500,000, the commission will not exceed ₹300.
Small entrepreneurs, such as vegetable sellers, tea stall owners, small grocery stores, and taxi drivers, actively use QR codes. They have received significant support: small traders and sellers whose total digital payment volume via QR code per month does not exceed ₹100,000 have been assigned P2PM status. For these sellers, the MDR commission will be completely zero (0%) regardless of whether the transaction exceeds ₹2000.
According to data, 96 percent or more of all vendor transactions via UPI in India are amounts of ₹2000 or less. The government claims that more than 95 percent of small and medium enterprises will remain completely outside the scope of this MDR commission.
