Archive · 5 Oct 2026
Pneucons to Disable UPI Payments, Citing New MDR Costs
Pneucons is a marketplace that sells industrial products.
It says it will stop accepting UPI payments from October 10.
Its co-founder says a new payment charge makes UPI costly for the company.
The charge is scheduled to start on October 15, 2026, for certain merchant payments above ₹2,000.
In one example, a ₹10,000 order becomes ₹11,800 after GST.
Pneucons says it earns ₹50 in commission on that order before tax.
The MDR on the full payment would be ₹47.20, leaving ₹2.80 of that commission before other costs.
The co-founder also says GST on the MDR must be paid upfront, although businesses can claim credits.
Some small merchants and specified transaction categories receive exemptions or different rates.
Ahmedabad-based industrial marketplace Pneucons says it will stop accepting UPI payments from October 10.
Co-founder Pritesh Lakhani says the decision is linked to a new 0.4% MDR on specified person-to-merchant UPI transactions above ₹2,000, effective October 15, 2026.
For a ₹10,000 order with 18% GST, the customer pays ₹11,800; a 0.4% MDR on that amount is ₹47.20.
Pneucons says its 0.5% pre-tax commission on the order is ₹50, so the MDR would consume about 94% of that commission before other costs.
The framework includes a ₹300 cap for transactions of ₹75,000 or more, special rates for specified sectors, and exemptions for eligible small merchants.
- Who
- Pneucons and its co-founder, Pritesh Lakhani.
- What
- Pneucons says it will stop accepting UPI payments, citing the cost of the new merchant discount rate.
- When
- Pneucons says the change begins October 10; the MDR framework is scheduled to take effect October 15, 2026.
- Where
- Pneucons is based in Ahmedabad, India; the payment framework applies in India.
- Why
- Lakhani says MDR on the GST-inclusive payment could consume about 94% of Pneucons' 0.5% pre-tax commission on an illustrative order.
Pneucons co-founder
Government sources and framework
Effect of MDR and GST
Pneucons co-founder
Lakhani says MDR calculated on the GST-inclusive payment could consume about 94% of Pneucons' commission, and that GST on MDR is paid upfront even though it is claimable.
Government sources and framework
Government sources said there is no separate GST on MDR, while clarifying that GST applies to applicable MDR charges and businesses can claim credits.
Who bears the charge
Pneucons co-founder
Pneucons says the charge puts pressure on its thin margins and is stopping UPI payments.
Government sources and framework
The framework assigns the MDR cost to merchants and directs banks to ensure it is not passed on to consumers.
- Pneucons UPI change
- The company says it will stop accepting UPI payments from October 10.
- Standard MDR
- 0.4% on specified person-to-merchant UPI transactions above ₹2,000, effective October 15, 2026.
- Pneucons commission
- 0.5% of an order's value before tax.
- Illustrative order
- A ₹10,000 order with 18% GST totals ₹11,800; 0.4% MDR on that amount is ₹47.20.
- Commission impact
- The example leaves ₹2.80 of Pneucons' ₹50 commission before other costs; Lakhani says the MDR consumes about 94% of the margin.
- Transaction cap
- MDR is capped at ₹300 for transactions of ₹75,000 and above.
- Special rates and exemptions
- Specified essential and thin-margin sectors face a flat ₹5 charge on eligible transactions above ₹2,000; eligible small merchants receiving up to ₹1 lakh monthly through UPI QR payments remain exempt.
- GST on MDR
- Lakhani says 18% GST on the ₹47.20 MDR adds about ₹8.50 upfront; government sources said GST applies to applicable MDR charges and businesses can claim credits.
