Archive · 20 Sep 2026
Businesses Can Refuse UPI Above ₹2,000, With Legal Exceptions
Some petrol pumps in Madhya Pradesh say they will not accept UPI payments above ₹2,000 from October 16.
They are worried about a possible fee called the Merchant Discount Rate, or MDR.
The proposed fee is 0.4% on certain UPI payments.
Dealers say their profit margin is only about 0.5%, so the fee could reduce their earnings significantly.
Other shops and traders in Delhi-NCR and Ghaziabad have also displayed cash-only or no-UPI signs.
In India, cash is still legal tender.
Most small businesses are not legally required to accept UPI.
Businesses with annual turnover above ₹50 crore must offer at least one digital payment method, though the articles do not say that this specifically has to be UPI.
The Madhya Pradesh Petroleum Dealers Association says its members will refuse UPI payments above ₹2,000 from October 16.
Dealers object to a proposed 0.4% Merchant Discount Rate on qualifying UPI transactions.
The association says petrol pumps earn about a 0.5% profit margin and cannot absorb the added cost.
Petrol pump dealers are seeking the same MDR exemption for UPI that applies to their credit and debit card transactions.
Businesses generally may choose not to accept UPI, but firms with annual turnover above ₹50 crore must provide at least one digital payment option.
- Who
- The Madhya Pradesh Petroleum Dealers Association, petrol pump dealers, and other merchants in Delhi-NCR and Ghaziabad.
- What
- Some merchants plan to refuse UPI payments above ₹2,000, citing a proposed 0.4% MDR charge.
- When
- The restriction announced by the association is scheduled to begin October 16; the year is not specified.
- Where
- Madhya Pradesh, Delhi-NCR, and Ghaziabad.
- Why
- Dealers say the proposed MDR would reduce their earnings because their profit margins are around 0.5%.
Merchant discretion
Digital-payment access
Responsibility for MDR costs
Merchant discretion
Petrol pump dealers say their roughly 0.5% profit margin is too small to absorb the proposed 0.4% UPI MDR and are seeking an exemption.
Digital-payment access
The government promotes a digital economy, but the articles do not state that it will require every merchant to absorb the charge or accept every UPI payment.
Whether UPI can be refused
Merchant discretion
For ordinary retailers, local vendors, and small businesses, choosing whether to accept UPI is generally at the merchant’s discretion because cash remains legal tender.
Digital-payment access
Businesses with annual turnover above ₹50 crore must provide at least one digital payment option, although the articles do not specify that this option must be UPI.
- UPI threshold
- The announced refusal would apply to payments above ₹2,000.
- Announced start date
- October 16; the year is not specified in the article.
- Proposed MDR
- 0.4% on the specified UPI transactions.
- Petrol pump margin
- Dealers say their profit margin is approximately 0.5%.
- Estimated impact
- The association estimates an average loss of about ₹590 per day, or ₹17,700 per month, at a pump.
- Digital-payment requirement
- Businesses with annual turnover exceeding ₹50 crore must provide at least one digital payment option.
- Cash status
- Cash remains legal tender in India.