1 hr ago
Mumbai Fuel Pumps Threaten UPI Shutdown Over MDR Fees
Mumbai petrol pumps may stop accepting UPI payments from October 15.
They are concerned about a new fee charged on some large UPI transactions.
The fee is 0.4% for person-to-merchant payments above Rs 2,000.
Petrol dealers say their fuel prices are regulated, so they cannot easily charge customers more to cover the fee.
They also say their profits are already limited and their commissions have not increased for years.
Dealers invested in digital payment systems when UPI payments did not have this fee.
More than 60% of sales at their outlets now use digital payments.
The dealers have asked the government and the Reserve Bank of India to remove the fee for fuel retailers.
Petrol pumps across Mumbai may stop accepting UPI payments from October 15.
The Petrol Dealers Association of Mumbai wants a complete waiver of MDR charges for fuel retailers.
The revised policy imposes a 0.4% MDR on person-to-merchant UPI transactions above Rs 2,000, with exemptions for some small and micro merchants.
Dealers say regulated fuel prices prevent them from passing the added payment costs to customers.
More than 60% of fuel sales at the association’s outlets are conducted through digital payments.
- Who
- The Petrol Dealers Association of Mumbai and petrol pump operators.
- What
- Petrol pumps have threatened to stop accepting UPI payments if MDR charges are not waived.
- Where
- Petrol pumps across Mumbai.
- When
- The threatened withdrawal of UPI facilities is scheduled for October 15.
- Why
- Dealers say the revised MDR would increase costs, reduce already limited margins, and cannot be passed on because fuel prices are regulated.
Fuel Dealers
Digital Payment Policy
MDR exemption
Fuel Dealers
Fuel retailers want the 0.4% MDR waived, arguing that it creates a substantial burden on businesses with limited margins.
Digital Payment Policy
The revised policy introduces the MDR for qualifying person-to-merchant UPI transactions, while retaining exemptions for certain small and micro merchants.
Effect on customers
Fuel Dealers
Dealers say they cannot pass the payment cost to motorists because fuel prices are regulated.
Digital Payment Policy
Observers warn that stopping UPI payments would inconvenience motorists who increasingly rely on digital payments and may not carry enough cash.
Key facts
- Threatened action
- Mumbai fuel pumps may withdraw UPI payment facilities from October 15.
- MDR rate
- A 0.4% merchant discount rate applies to person-to-merchant UPI transactions above Rs 2,000.
- Requested relief
- The Petrol Dealers Association of Mumbai is seeking a complete MDR waiver for fuel retailers.
- Digital payment share
- More than 60% of fuel and diesel sales at the association’s outlets are conducted digitally.
- Government contacts
- The association has written to the Reserve Bank of India and the Finance Ministry.
- Dealer concern
- Operators say regulated fuel prices prevent them from passing the additional transaction cost to customers.
- Existing investment
- Dealers say they invested in digital payment infrastructure under the earlier zero-MDR framework.
Quotes
Chetan Modi
President of the Petrol Dealers Association of Mumbai
“Our retail outlets have achieved over 60 percent digitalisation of all fuel and diesel sale transactions through intensive infrastructural deployment under the explicit assurance of a zero-MDR environment. However, the revised implementation creates an existential crisis for retailers due to multiple critical constraints.”
deccanchronicle.com
Sources
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