Industrial marketplace Pneucons will stop accepting UPI payments for orders from October 10, as India prepares to implement a new merchant fee on higher-value transactions, signalling a shift towards a more sustainable digital payments ecosystem.
Industrial marketplace Pneucons will stop accepting UPI payments for orders from October 10 as India’s payments system prepares for a new merchant fee on some higher-value transactions, according to reports on the change. The move comes ahead of a revised merchant discount rate, or MDR, framework announced by the National Payments Corporation of India, the body that runs the UPI rail.
Under the updated rules, a 0.4% MDR will apply from October 15 to person-to-merchant UPI payments above Rs2,000, while consumer-to-consumer transfers and lower-value merchant payments will remain free, according to multiple reports on the framework. The fee will be capped at Rs300 a transaction, with the aim of making the UPI business model more sustainable without adding costs for ordinary users.
The broader impact is expected to fall on larger commercial payments rather than everyday retail spending. According to Mint, small and micro merchants, including street vendors, will continue to be able to accept up to Rs1 lakh a month through UPI QR codes under a separate category without charges, and the framework also contemplates a dedicated fund to support wider UPI adoption among smaller businesses. NPCI has also rejected speculation that the change would create a tax burden for small merchants or make digital payments more expensive for consumers.
For businesses such as Pneucons, the new rules may affect how they manage payment acceptance and transaction costs on larger orders. By turning off UPI before the new MDR takes effect, the marketplace appears to be avoiding being caught in the transition as merchants and payment providers adjust to the revised fee structure.
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