CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: New Delhi. The impact of the proposed Merchant Discount Rate (MDR) on UPI payments has begun to be seen at petrol pumps. According to reports, some petrol pumps have put up posters giving preference to cash payments for transactions above ₹2,000.
In some places, including Alwar in Rajasthan, customers are avoiding large UPI payments and opting for cash or smaller digital payments. Under the new UPI framework, from 15 October, an MDR of ₹5 per transaction will apply to UPI transactions above ₹2,000 for fuel payments such as petrol and diesel. This charge will be borne by the merchant, meaning the petrol pump operator, and not directly by the customer. Payments up to ₹2,000 will not be affected by this arrangement.
Petrol pump dealers say margins in the fuel business are limited and the additional charge could affect their costs. Dealer associations in several states have demanded that the government exempt petrol pumps from this charge. Some organisations have warned that if their demand is not accepted, they may stop accepting UPI payments above ₹2,000.
Meanwhile, the government has clarified that MDR is not a tax and there is no provision to collect it separately from customers. According to the government, around 96 percent of merchant transactions will not be affected by this change. However, concerns among petrol pump operators have started a discussion on the possibility of increased cash use for large fuel payments.
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