Petrol pump dealers in Madhya Pradesh plan to stop accepting UPI payments above Rs 2,000 from October 16, citing the new merchant discount rate aimed at digital fuel purchases, prompting industry concerns over margins and payment exemptions.
Petrol pump dealers in Madhya Pradesh plan to stop accepting UPI payments above Rs 2,000 from October 16, escalating a dispute over new charges on digital fuel purchases. The move comes after the National Payments Corporation of India introduced a merchant discount rate, or MDR, of 0.4 per cent on UPI merchant transactions above that threshold, while smaller payments remain free for consumers.
Ajay Singh, president of the Madhya Pradesh Petroleum Dealers Association, said the change would hit operators who already work on slim margins. He said each pump could lose about Rs 590 a day, or roughly Rs 17,700 a month, if around 100 customers a day pay more than Rs 2,000 through UPI. Singh said dealers can absorb card payments because credit and debit card transactions are exempt from MDR, but not the new cost attached to larger UPI purchases.
The association has asked the government to extend the same exemption for UPI that petrol pumps already receive on card payments. Singh argued that the current policy leaves dealers with no practical way to cover the extra expense, and urged officials to reconsider the impact on fuel retailers before the change takes effect.
The policy could affect about 4,700 petrol pumps across the state, according to reports from Outlook Money and other outlets. Industry estimates cited by local publications put the added burden at more than Rs 17,000 a month per pump, with the association also seeking relief from GST-related charges on higher-value UPI transactions. If the plan goes ahead, motorists making larger fuel purchases will need to switch to cash or cards.
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