Mumbai Petrol Pumps Threaten To Stop UPI Payments From October 15 Over Revised MDR

Mumbai's petrol pump owners have threatened to cease accepting UPI payments starting October 15 unless the government waives the revised merchant discount rate (MDR) for fuel retailer transactions exceeding Rs 2,000. The Petrol Dealers Association of Mumbai wrote to the RBI and Finance Ministry requesting a complete exemption. The Finance Ministry's revised MDR regime imposes a uniform 0.4% charge on P2M UPI transactions above Rs 2,000, with exceptions for small vendors and micro merchants.

Petrol dealers argue that the charge will strain their already thin margins as fuel prices are regulated and cannot be passed onto customers. Chetan Modi, president of the association, expressed concern over the existential crisis faced by their retail outlets due to multiple constraints. The association claims petrol pumps have invested heavily in digital payment infrastructure, but the revised MDR implementation threatens their financial viability.

The threat of withdrawing UPI payments could inconvenience motorists who no longer carry cash. Transport sector experts also warned that additional transaction costs could negatively impact transporters and consumers.