MP petrol pump dealers to stop accepting UPI payments above Rs 2,000 from Oct 16 over MDR charges

Bhopal (Madhya Pradesh) [India], September 19 (ANI): The Madhya Pradesh Petroleum Dealers Association has announced that its members will not accept UPI payments above Rs 2,000 from October 16, citing the 0.4 per cent Merchant Discount Rate (MDR) charge proposed on such transactions.
Association president Ajay Singh said the decision was taken as fuel pump dealers operate on a narrow profit margin and would not be able to absorb the additional cost.
“We have written a letter to our State-Level Coordinator (SLC) regarding the government’s decision that an MDR charge of 0.4 per cent will be levied on UPI transactions above Rs 2,000 from October 16. The situation is that, on average, around 100 customers at each petrol pump make transactions above Rs 2,000. This will result in a loss of around Rs 590 per day, which comes to approximately Rs 17,700 per month,” Singh said.
He added petrol pump dealers have a profit margin of around 0.5 per cent and therefore cannot absorb the additional expense.
“We cannot recover this because our profit margin is very small. We are able to make only around 0.5 per cent profit, and we are not in a position to bear any additional expense. If customers use credit or debit cards from October 16, we have no problem and they can use them without any limit. But we will not accept UPI payments above Rs 2,000,” he said.
Singh also urged the government to extend the exemption from MDR charges available to petrol pumps on credit and debit card transactions to UPI payments as well.
“Now it is up to the government. We have already been given an exemption from MDR charges on credit and debit card transactions. So, we request the government to extend the same exemption to UPI as well, considering the special circumstances under which petrol pumps were granted an exemption on credit and debit card transactions,” the association president said. 
When asked about the impact on customers, Singh said they would not accept UPI payments above Rs 2,000 though customers would continue to have the option of paying through debit and credit cards.
“It is for the public to decide what the government is doing with them. We have no choice, so we will not accept UPI payments above Rs 2,000. Nonetheless, for the convenience of customers, we have kept both debit and credit card facilities available,” he added. 
The National Payments Corporation of India (NPCI) on September 15 introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The government has said around 96 per cent of P2M transactions will remain unaffected, while MDR will be distributed among payment ecosystem participants, including banks and payment application providers.
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction. (ANI)