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Pneucons to Disable UPI, Citing New Merchant Charges
Pneucons is an online marketplace for industrial products.
Its co-founder says it will stop taking UPI payments from October 10.
He is concerned about a new charge that merchants may have to pay on some large UPI purchases.
For a sample ₹10,000 order, Pneucons says its commission is ₹50, while the calculated payment charge would be ₹47.20.
That would leave only ₹2.80 of the commission before other costs.
The article says the new charge is meant for specified merchant payments above ₹2,000 and starts October 15, 2026.
Customers are not supposed to pay the charge themselves.
Some small merchants and specified sectors have different rules.
Government sources said there is no separate GST on MDR, while clarifying that GST applies to applicable MDR charges and businesses can claim credits.
Pneucons plans to stop accepting UPI payments from October 10, according to co-founder Pritesh Lakhani.
The article says a 0.4% MDR is due on specified merchant UPI transactions above ₹2,000 from October 15, 2026.
Lakhani says Pneucons earns a 0.5% commission before tax; on a ₹10,000 order, that is ₹50.
For a ₹10,000 order with 18% GST, the article calculates a ₹47.20 MDR on the ₹11,800 customer payment, leaving ₹2.80 of the commission before other costs.
The framework described includes a ₹300 cap for transactions of ₹75,000 or more, exemptions for certain small merchants, and a flat ₹5 MDR for specified essential sectors.
- Who
- Ahmedabad-based industrial marketplace Pneucons and its co-founder, Pritesh Lakhani.
- What
- Pneucons says it will disable UPI payments, citing the effect of merchant discount rate charges on its margins.
- Where
- Pneucons is based in Ahmedabad, India; the payment framework applies in India.
- When
- Pneucons says it will disable UPI from October 10; the specified MDR framework is stated to take effect October 15, 2026.
- Why
- Lakhani says the 0.4% MDR on the GST-inclusive payment could consume most of Pneucons' 0.5% pre-tax commission on qualifying orders.
Pneucons co-founder
Government sources and payment framework
Effect of MDR and GST
Pneucons co-founder
Lakhani says the MDR on a GST-inclusive payment could consume 94% of Pneucons' commission, with GST paid upfront creating an additional working-capital burden.
Government sources and payment framework
Government sources said there is no separate GST on MDR; they clarified that GST applies to applicable MDR charges and businesses can claim credits.
Who bears the charge
Pneucons co-founder
Pneucons says the new merchant charge makes UPI payments uneconomic for its thin-margin business.
Government sources and payment framework
The framework directs banks to ensure merchants do not pass the MDR cost on to consumers.
Key facts
- Pneucons UPI change
- The company says it will disable UPI payments from October 10.
- MDR rate and threshold
- 0.4% on specified merchant UPI transactions above ₹2,000, effective October 15, 2026, according to the article.
- Pneucons commission
- 0.5% of an order's value before tax.
- Illustrative order
- A ₹10,000 order with 18% GST totals ₹11,800; the article calculates MDR of ₹47.20.
- Commission remaining
- The example leaves ₹2.80 of the original ₹50 commission before other costs.
- High-value cap
- For transactions of ₹75,000 and above, MDR is capped at ₹300 per transaction.
- Other stated rules
- Specified essential sectors face a flat ₹5 charge; eligible neighbourhood shops receiving up to ₹1 lakh monthly via UPI QR codes remain exempt.
Quotes
Government sources
Unnamed government sources speaking to news agency ANI.
“The ₹8.50 GST on MDR is claimable, but it's paid upfront. That's working capital stuck on every order.”
livemint.com
“After thoughtful consideration we have decided to disable UPI going forward from 10th Oct.”
livemint.com
Sources
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