MP fuel pumps to stop UPI payments above Rs 2,000 from 16 October

• Fuel pump dealers in Madhya Pradesh plan to stop accepting UPI payments above Rs 2,000 from 16 October if the proposed MDR is not rolled back.

• The dealers’ association says thin margins make the additional digital-payment cost difficult to absorb.

• CAIT has urged the Centre to exempt business transactions, including fuel purchases, from MDR.

Fuel pump dealers in Madhya Pradesh have decided to stop accepting UPI payments above Rs 2,000 for petrol and diesel purchases from 16 October, citing the proposed merchant discount rate (MDR) on digital transactions.

The Confederation of All India Traders (CAIT) on Friday, 18 September said the move was a matter of concern for the country’s digital-payment ecosystem, given the government’s push for UPI as a key pillar of Digital India and a cashless economy.

CAIT Bhopal district president and Madhya Pradesh media in-charge Dharmendra Sharma said around 4,700 petrol pumps in the state would be affected by the decision.

He said a proposed MDR of 0.4 per cent on eligible UPI merchant transactions above Rs 2,000 would translate into a charge of Rs 40 on a Rs 10,000 payment. For fuel transactions, a flat MDR of Rs 5 on payments above Rs 2,000 has also been reported.

MP Petrol Pumps Dealers Association president Ajay Singh told PTI that members would impose the Rs 2,000 UPI limit at their fuel stations from 16 October if the government did not withdraw the proposed MDR.

“With the new system, a petrol pump has to bear a loss of Rs 17,700 monthly. There are 4,700 fuel stations in MP. Our margin is less so we can’t bear this extra expenditure,” he said.

Sharma said imposing charges after encouraging merchants and consumers to adopt digital payments could slow the shift towards a cashless economy. “This is not merely a matter of a few rupees in cost, but a question of the direction of policy,” he said.

CAIT has urged the Union government to reconsider the proposed charges and keep business transactions, including petrol and diesel purchases, exempt from MDR.

“Traders are already operating amid costs, competition and limited margins. An additional cost on digital payments could affect their profits and eventually discourage the use of such payments,” Sharma said.

He said India’s UPI system had emerged as a global example of digital payments and argued that restrictions on its use would be a matter of concern. Sharma urged the government to take into account the practical difficulties faced by traders and reconsider the proposed charges.

With PTI inputs