Traders Withdraw ‘No UPI Day’ Protest After Meeting Finance Minister

Leading traders’ organisations have withdrawn their call to observe October 2 as “No UPI Day” after a delegation met Union Finance Minister Nirmala Sitharaman in New Delhi on Wednesday to discuss concerns over the proposed merchant fee on certain UPI transactions.

A delegation of around 20 representatives from traders’ bodies across several states met Sitharaman to raise concerns over the proposed 0.4 per cent fee on merchant UPI transactions above Rs 2,000.

The traders argued that the proposed charge could increase the financial burden on small and medium businesses and potentially affect the adoption of digital payments among merchants.

The delegation was led by Praveen Khandelwal, Chandni Chowk MP and secretary general of the Confederation of All India Traders (CAIT).

The representatives sought clarity on the proposed charge and urged the government to consider the concerns of the trading community before its implementation.

The All India Consumer Products Federation and the All India Mobile Retailers Association had earlier announced the October 2 “No UPI Day” protest against the proposed fee.

The organisations subsequently decided to withdraw the protest call following their discussions with the Finance Minister.

Speaking to reporters after the meeting, Khandelwal said the decision followed constructive discussions and assurances that the concerns raised by traders would receive due consideration.

He said the trading community was encouraged by the dialogue with the government and would continue discussions on the issue.

The proposed 0.4 per cent fee on eligible merchant UPI transactions above Rs 2,000 is scheduled to take effect from October 15. Traders’ bodies said they remained hopeful that their concerns would be addressed before the proposed charge comes into effect.

The issue comes amid clarification from the National Payments Corporation of India (NPCI) earlier this month regarding reports about GST on UPI Merchant Discount Rate (MDR).

NPCI said MDR applies only to person-to-merchant (P2M) transactions above Rs 2,000, while transactions up to Rs 2,000 continue to have zero MDR and therefore no GST impact arising from MDR.

“This is incorrect. MDR applies only to P2M transactions above Rs 2,000. Transactions up to Rs 2,000 continue to have zero MDR and therefore zero GST impact,” NPCI said in a statement.

Government data cited by NPCI indicates that transactions of up to Rs 2,000 account for more than 96 per cent of UPI merchant transaction volume. Consequently, the majority of UPI merchant transactions would continue without MDR and the associated GST impact.