Two Trader Bodies Call Off October 2 'No UPI Day' After Meeting Sitharaman Over Merchant Fee

A planned nationwide boycott of UPI payments by traders has lost two of its key backers. Two trade associations that had called for a "No UPI Day" on October 2 withdrew from the protest on Wednesday after a delegation met Finance Minister Nirmala Sitharaman in New Delhi and was told its concerns over the proposed merchant fee would be taken up.

The All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF) announced the decision in a joint statement. The delegation of about 20 trade leaders from several states was led by Praveen Khandelwal, the Chandni Chowk MP and secretary general of the Confederation of All India Traders (CAIT).

What the fight is about

At the centre of the dispute is a proposed merchant discount rate, or MDR, of 0.4 per cent on UPI payments to merchants above Rs 2,000. The charge, which set off a political row earlier this month, is reported to be scheduled to take effect from October 15. Person-to-person transfers are not covered.

For large retailers the fee is a routine cost of accepting digital payments, as it already is with cards. For small shopkeepers and distributors working on thin margins, however, a 0.4 per cent cut on every larger sale adds up, particularly on high-ticket items like mobile phones, which is why a mobile retailers' body was among the most vocal opponents.

What traders asked for

The delegation did not ask the government to scrap the fee outright. Its requests were narrower:

• Delay the rollout until after the festive season, when trading volumes are at their peak.
• Phase it in, starting at 0.20 per cent in FY 2026-27 and rising by 0.05 percentage points a year until it reaches 0.40 per cent.
• Raise the threshold above which the fee applies to Rs 5 lakh, to reflect how merchants actually transact.
• Exempt merchant-to-merchant payments, which are common in wholesale and distribution chains.
• Set up a committee to study the issues and recommend a balanced approach.

According to the joint statement, Sitharaman heard the delegation out and assured it that the issues would be considered. CAIT said the minister reiterated the government's commitment to promoting digital payments while protecting the interests of all stakeholders. Khandelwal described the talks as constructive.

What happens next

The withdrawal takes much of the momentum out of a coordinated day of card-and-cash-only trading, which would have fallen on Gandhi Jayanti during the busy run-up to Diwali. Other trade groups had also backed the call, and it was not immediately clear whether all of them would follow suit. But it does not settle the underlying question. No change to the MDR framework, its threshold or its start date has been announced, and the trader bodies' demands remain on the table.

The next signal to watch is whether the October 15 start date holds, or whether the government softens the rollout along the lines traders proposed. The trade leaders stressed that they support UPI and the Digital India push, and said their aim is a framework that works for both consumers and small businesses rather than opposition to digital payments as such.

For consumers, nothing changes for now: UPI payments remain free to make, and the proposed fee is levied on the merchant side of the transaction.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.