Business groups plan UPI shutdown protest against new merchant fees

Business associations across India are preparing a coordinated protest against fresh charges on UPI transactions, planning a symbolic shutdown of digital payment services on October 2. The demonstration targets a 0.4 per cent merchant discount rate (MDR) scheduled to take effect on October 15 for UPI merchant payments exceeding Rs 2,000.

The MDR, which effectively amounts to a transaction fee for merchants, has drawn sharp criticism from the retail and small business sectors. Traders argue the levy will increase operational costs at a time when many enterprises are still recovering from economic pressures, potentially forcing some to abandon digital payment options or pass charges to consumers.

The October 2 date—coinciding with Gandhi Jayanti—appears strategically chosen to amplify the protest's visibility. Business groups plan to encourage merchants to temporarily suspend UPI acceptance to demonstrate the impact of the new charges on commerce and payment infrastructure.

The government had previously exempted small transactions from MDR charges, but the current policy extending levies to payments above Rs 2,000 represents a significant expansion. The National Retail Federation and various trader associations have signaled strong opposition, warning of broader economic implications if the fee structure discourages digital payment adoption among informal sector businesses.