While some Indian trade associations advocate for a strike on 2 October to protest proposed merchant discount rates on UPI transactions, others backtracked after discussions with Finance Minister Nirmala Sitharaman, highlighting a divided stance on the issue.
Plans for a “No UPI Day” protest over proposed charges on large merchant digital payments have exposed a split among Indian trade bodies, with some groups still urging shops to refuse UPI on 2 October while others have backed away after talks with Finance Minister Nirmala Sitharaman. The debate centres on a proposed merchant discount rate, or MDR, of 0.4% for certain UPI transactions above ₹2,000, which is due to take effect on 15 October 2026.
According to reports from LiveMint, business-standard.com and other outlets, the protest was originally intended to include mobile retailers and wider trader associations, some of which said they would cover UPI scanners, QR codes and related devices with black cloth as a symbolic act. The Confederation of Traders of India, or CTI, has continued to press for a day of cash-only transactions, while the Maharashtra Chamber of Commerce, Industry & Agriculture has also backed the campaign.
But the picture is far from uniform. LiveMint reported that the Confederation of All India Traders, the All India Mobile Retailers Association and the All India Consumer Products Distributors Federation later called off their planned protest after a meeting with Sitharaman. The groups said they had submitted a joint memorandum seeking a delay to the MDR plan, a phased rollout, a revision of the threshold and the exclusion of merchant-to-merchant payments from the proposed framework.
The government’s proposal would not apply to person-to-person UPI transfers or to payments below ₹2,000. Where it does apply, the charge would fall on merchants rather than on consumers. For some regulated sectors, including railway tickets, telephone bills, insurance, fuel and certain agricultural payments, the framework envisages a flat MDR of ₹5 on transactions above ₹2,000, while the maximum charge on UPI payments of ₹75,000 or more would be capped at ₹300.
Trade bodies opposing the move argue that the burden could fall on millions of small businesses and may discourage wider UPI adoption. CTI says as many as 6 crore merchants could face higher costs. The issue has also moved into the courts: according to the reports, the proposed framework has been challenged in the Supreme Court, which has sought responses from the Centre, the Reserve Bank of India and the National Payments Corporation of India on the legal basis for the levy and how any revenue would be distributed.
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