Archive · 19 Sep 2026
UPI MDR Changes Trigger Merchant Pushback and Stockbroker Concerns
A new rule would make some businesses pay a fee when customers use UPI for larger payments.
Petrol stations in Mumbai say they might reject UPI payments above ₹2,000 from 15 October.
Fuel sellers would pay ₹5 for those transactions under the current plan.
Other retailers worry the fees could make cash more attractive than digital payments.
Some shops in Ghaziabad have already displayed signs rejecting UPI payments.
Business groups have asked the government to keep UPI free for merchants.
A court petition is also asking for the new rules to be paused.
Nithin Kamath says the fees could make it harder for stockbrokers to operate profitably.
Mumbai petrol pump dealers may stop accepting UPI payments above ₹2,000 from 15 October unless fuel retailers receive an exemption.
Fuel is classified as an essential or thin-margin category, with a flat ₹5 charge on transactions above ₹2,000 instead of the 0.4% MDR.
Retailers, clothing manufacturers and consumer-product distributors say the charges could encourage customers and merchants to use cash.
A Supreme Court PIL seeks suspension of the framework, alleging insufficient statutory authority, transparency and safeguards.
Zerodha CEO Nithin Kamath warned that a 0.02% fee on capital-market transactions, capped at ₹300, could challenge stockbroking economics.
- Who
- Petrol pump dealers, retailers, manufacturers, distributors, traders and stockbrokers are affected; Nithin Kamath has raised concerns about the impact.
- What
- A new UPI merchant discount rate framework would impose charges on certain higher-value merchant transactions.
- When
- The framework was announced recently, and Mumbai petrol pump dealers have threatened action from 15 October.
- Where
- The reported protests and concerns involve merchants across India, including Mumbai and Ghaziabad.
- Why
- Merchant groups oppose the additional costs, saying they could hurt thin-margin businesses and encourage cash payments.
Merchant and Industry Concerns
Framework Terms and Application
Fuel payments
Merchant and Industry Concerns
Petrol pump dealers say additional charges would burden fuel retailers and may lead them to reject UPI payments above ₹2,000.
Framework Terms and Application
The framework places fuel in the essential or thin-margin category and sets a flat ₹5 charge above ₹2,000 rather than the 0.4% MDR.
Retail payments
Merchant and Industry Concerns
Retail and distribution groups argue that fees could push merchants and customers toward cash, particularly during the festive season.
Framework Terms and Application
The framework introduces merchant charges for qualifying UPI transactions, although the article does not report a detailed government response to the industry objections.
Stockbroking transactions
Merchant and Industry Concerns
Nithin Kamath warned that the 0.02% fee, capped at ₹300, could challenge the economics of stockbroking.
Framework Terms and Application
The framework applies a separate capped rate to capital-market transactions, including payments to stockbrokers, mutual funds and securities dealers.
- Standard merchant charge
- The framework includes a 0.4% MDR for merchants on transactions above ₹5, according to the report.
- Fuel transaction charge
- Fuel, classified as an essential or thin-margin category, would face a flat ₹5 charge on transactions above ₹2,000.
- Petrol pump response
- Mumbai dealers may stop accepting UPI payments above ₹2,000 from 15 October if no exemption is granted.
- Capital-market charge
- Payments involving stockbrokers, mutual funds and securities dealers would attract 0.02% of the transaction value, capped at ₹300.
- Legal challenge
- A public-interest litigation petition in the Supreme Court seeks suspension of the framework.
- Other merchant response
- Some merchants in Ghaziabad have displayed signs saying UPI payments will not be accepted.