No UPI Day On October 2: Maharashtra Traders Plan Cash-Only Protest Over 0.4% MDR; What Customers Should Know

Maharashtra traders are set to observe October 2 as "No UPI Day", with business associations planning a cash-focused protest against the new Merchant Discount Rate (MDR) proposed for certain high-value UPI merchant transactions. The protest is being led by the Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA) and comes ahead of the new UPI merchant charge taking effect from October 15.

The issue centres on a 0.4% MDR on eligible person-to-merchant (P2M) UPI transactions above Rs 2,000. Trader bodies say the additional cost could put pressure on businesses operating on thin margins, particularly smaller retailers and traders.

No UPI Day On October 2: What Are Maharashtra Traders Planning?

Under the protest plan, participating traders are expected to temporarily stop accepting UPI payments and ask customers to pay in cash. Trade associations have also said that QR codes, UPI scanners and sound boxes could be covered with black cloth as a symbolic demonstration.

MACCIA president Ravindra Mangave said the October 2 campaign would not be restricted to Maharashtra, with several trader organisations across the country also expected to participate. MACCIA and its affiliated associations are also planning to put forward their concerns before the Maharashtra government.

The protest follows a similar campaign held in Madhya Pradesh on September 23, when traders in cities including Indore, Bhopal, Jabalpur and Gwalior covered QR codes and, in some cases, asked customers to make payments in cash. The response was not uniform across all establishments, with some traders continuing to accept UPI payments.

Why Are Traders Opposing New UPI MDR?

The key concern among trader bodies is the proposed 0.4% merchant charge on eligible UPI payments above Rs 2,000. MDR is a fee paid by a merchant for accepting a digital payment.

For a Rs 10,000 eligible UPI transaction, a 0.4% MDR would amount to Rs 40. The charge is capped at Rs 300 for transactions of Rs 75,000 and above, according to the reported framework.

Trader representatives argue that even relatively small charges can matter for businesses with narrow profit margins. Their concern is particularly relevant for retailers, distributors and other businesses where large numbers of digital transactions are part of routine sales.

The debate is therefore not about whether customers should be allowed to use UPI, but about who bears the cost of processing certain merchant transactions.

Will Customers Have To Pay UPI Charges From October?

The proposed MDR is a merchant-side charge, meaning customers will not see a separate 0.4% UPI fee added to their payment simply because they use UPI.

The government has also said that the new framework is not intended to allow banks or payment providers to pass the MDR directly on to customers. Person-to-person UPI transactions remain outside this merchant-payment charge.

There are also exemptions and differentiated rates within the new framework. Payments of up to Rs 2,000 are not covered by the 0.4% MDR, while certain sectors have separate treatment. Small merchants meeting the specified eligibility conditions are also set to remain exempt.

The October 2 protest does not mean UPI will be switched off across India. It is a voluntary trade protest, so its impact will depend on which shops and associations participate.

Customers visiting participating establishments may be asked to pay in cash. However, UPI should continue to function normally at non-participating merchants, online platforms and other businesses that continue to accept digital payments.

This means consumers should not assume that all UPI QR codes will stop working on October 2. The protest is being organised by participating trade associations rather than being a nationwide shutdown of the UPI network.

The Maharashtra announcement follows a similar protest in Madhya Pradesh on September 23. Traders in several cities, including Indore and Bhopal, protested against the proposed MDR by covering UPI QR codes and asking customers to use cash.

In Indore, several trader associations participated in the campaign, while reports from Bhopal indicated a mixed response, with some establishments continuing to accept UPI payments despite the protest call.

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