Petrol pump dealers in Madhya Pradesh have announced that they will stop accepting UPI payments above Rs 2,000 from October 16, citing the additional merchant charges under the new UPI Merchant Discount Rate (MDR) framework.The Madhya Pradesh Petroleum Dealers Association said fuel pump operators, who work on thin profit margins, would not be able to absorb the additional cost. Association president Ajay Singh said the decision was taken after the new MDR framework was announced.“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, according to news agency ANI.“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 added.What petrol pump dealers wantSingh urged the government to extend the MDR exemption 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,” he said.On the impact on customers, Singh said petrol pumps would continue accepting debit and credit cards without any limit.“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.What is the new UPI MDR framework?The National Payments Corporation of India (NPCI) introduced a new MDR framework on September 15. Under the broader framework, selected Person-to-Merchant (P2M) UPI transactions above Rs 2,000 will attract an MDR of 0.4%, capped at Rs 300 per transaction.However, fuel payments have a separate flat-rate provision. UPI payments for fuel purchases above Rs 2,000 at petrol stations will attract a fixed MDR of Rs 5 per transaction, while transactions up to Rs 2,000 will continue to have zero MDR.The MDR is a charge on the merchant and is not directly payable by the customer. The government has also said that around 96% of P2M UPI transactions will remain unaffected under the new framework.For customers, UPI payments will continue to be free of charge, while merchants and participants in the payment ecosystem will bear the applicable MDR.
