Traders withdraw ‘No UPI Day’ protest after meeting FM Sitharaman

A delegation of around 20 representatives from trade bodies across several states met Sitharaman to discuss concerns over the proposed 0.4 per cent fee on eligible merchant UPI transactions above Rs 2,000.

The traders argued that the proposed charge could increase costs for small and medium-sized businesses and potentially affect the wider adoption of digital payments among merchants. The delegation was led by Chandni Chowk MP and Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal.

During the meeting, the representatives sought greater clarity on the proposed fee and urged the government to consider the concerns of the trading community before its implementation.

The All India Consumer Products Federation and the All India Mobile Retailers Association had earlier announced plans to observe October 2 as “No UPI Day” to protest the proposed charge. Following their discussions with the finance minister, however, the organisations decided to call off the protest.

Khandelwal said the decision followed what he described as constructive discussions and assurances that the concerns raised by traders would be considered.

He said the trading community was encouraged by the dialogue and would continue discussions with the government on the issue.

Despite the withdrawal of the protest, the proposed 0.4 per cent fee on eligible merchant UPI transactions above Rs 2,000 is scheduled to take effect from October 15. Traders’ organisations said they remain hopeful that their concerns will be addressed before the proposed charge comes into force.

Earlier this month, the National Payments Corporation of India (NPCI) rejected reports suggesting that GST on UPI Merchant Discount Rate (MDR) would significantly increase costs for small merchants and make digital payments more expensive.

“This is incorrect. MDR applies only to P2M transactions above Rs 2,000. Transactions up to Rs 2,000 continue to have zero MDR and therefore zero GST impact,” NPCI said in a statement.

Government data indicates that transactions of up to Rs 2,000 account for more than 96 per cent of UPI merchant transaction volume. Consequently, most UPI merchant transactions would continue without MDR and, therefore, without GST being applied to MDR.