Leading traders' bodies withdrew their call to observe 2 October as 'No UPI Day' on Wednesday, 30 September, after a delegation of around 20 trade representatives met Finance Minister Nirmala Sitharaman in New Delhi to raise concerns over a proposed 0.4 per cent fee on merchant UPI transactions above ₹2,000.

What Triggered the Protest Call

The All India Consumer Products Federation and the All India Mobile Retailers Association had originally announced plans to observe a 'No UPI Day' in protest against the proposed merchant discount rate (MDR) charge. Traders argued the fee would increase the financial burden on small and medium businesses and could dampen digital payment adoption — a concern that has surfaced repeatedly since the government first signalled a rethink on zero-MDR policy for UPI.

The delegation was led by Praveen Khandelwal, Member of Parliament from Chandni Chowk and Secretary General of the Confederation of All India Traders (CAIT), with representatives drawn from multiple states.

What Came Out of the Meeting

Speaking to reporters after the meeting, Khandelwal said the decision to withdraw the protest was taken following what he described as constructive talks. He said traders were encouraged by the dialogue and that the concerns raised by the community would receive due consideration from the government. No formal rollback of the proposed charge was announced, however.

Despite the withdrawal of the protest call, the 0.4 per cent MDR on eligible merchant UPI transactions above ₹2,000 remains scheduled to come into effect from 15 October. Traders' bodies said they remain hopeful that their concerns will be addressed before the charge is implemented.

NPCI's Position on the Fee

Earlier this month, the National Payments Corporation of India (NPCI) pushed back against reports suggesting that GST on UPI MDR would burden small merchants and make digital payments more expensive. 'This is incorrect. MDR applies only to P2M transactions above ₹2,000. Transactions up to ₹2,000 continue to have zero MDR and therefore zero GST impact,' NPCI said in a statement.

According to government data, transactions of up to ₹2,000 account for more than 96 per cent of UPI merchant transaction volume by count — meaning the overwhelming majority of UPI payments will not attract MDR or any associated GST.

What Happens Next

The proposed charge is set to kick in on 15 October, and traders' bodies have indicated they will continue engaging with the government ahead of that deadline. The outcome of those discussions will determine whether the MDR framework proceeds as planned or is modified before implementation. Industry observers note that the episode reflects broader tensions between the government's push to monetise the UPI infrastructure and the trading community's sensitivity to any cost that could slow merchant-side adoption of digital payments.