Mobile phone retailers across India are set to observe October 2 as ‘No UPI Day’ in protest against the proposed 0.4% Merchant Discount Rate (MDR) on eligible merchant UPI transactions above ₹2,000. The protest has been called by the All India Mobile Retailers Association (AIMRA).
As part of the protest on Gandhi Jayanti, participating retailers plan to temporarily stop accepting UPI payments and symbolically cover their UPI QR codes with black cloth. AIMRA says the move is intended to highlight concerns over the additional financial burden that the new MDR could place on mobile retailers.
Why Are Mobile Retailers Observing ‘No UPI Day’?
AIMRA's objection centres on the introduction of MDR on certain higher-value merchant UPI transactions.
Under the new framework scheduled to take effect from October 15, 2026, a 0.4% MDR will apply to eligible Person-to-Merchant (P2M) UPI transactions above ₹2,000. The charge is a merchant-side fee rather than a direct charge on consumers.
AIMRA argues that mobile retailers operate on relatively thin margins and that additional payment costs could affect their earnings.
What Is the 0.4% UPI MDR Rule?
The key points are:
UPI transaction MDR position
Eligible P2M transaction above ₹2,000 0.4% MDR
P2P transaction No MDR
Certain small-merchant transactions Exempt
Consumer directly paying the MDR No
The framework also provides a cap of ₹300 for transactions of ₹75,000 or more, according to current reports.
Therefore, the new rule should not be interpreted as a blanket charge on all UPI transactions above ₹2,000.
How Much Could Small Mobile Retailers Lose?
AIMRA has estimated that the MDR could create a significant financial burden for small mobile retailers.
According to the association, retailers processing between ₹5 lakh and ₹30 lakh in monthly UPI business could face an estimated net monthly impact ranging from around ₹2,000 to ₹12,000.
AIMRA has further estimated the combined burden on small mobile retailers at approximately ₹40 crore per month, or nearly ₹500 crore annually. These figures are AIMRA's estimates, not independently verified projections.
What Is AIMRA's Demand?
AIMRA has clarified that its protest is not against UPI or the Digital India programme.
The association wants merchant UPI payments to continue under a Zero MDR structure.
AIMRA Vice President and Delhi-NCR President Tarvinder Singh said the association's concern is the additional financial burden on merchants that accept digital payments. He argued that digital payments should remain cost-effective for retailers if India is to continue expanding its digital-payment ecosystem.
What Will Happen on October 2?
On October 2, participating mobile retailers are expected to:
Temporarily stop accepting UPI payments.
Cover their UPI QR codes with black cloth.
Use the protest to highlight concerns about merchant MDR.
Demand continuation of the Zero-MDR regime for merchant UPI payments.
The action is planned as a one-day symbolic protest on Gandhi Jayanti.
Will Customers Have to Pay 0.4% on UPI?
No. The 0.4% MDR is a merchant-side charge applicable to specified UPI merchant transactions. It is not a blanket fee that consumers will pay every time they make a UPI payment above ₹2,000. P2P transfers remain outside the MDR framework, while certain small merchants and payment categories have exemptions.
The government and payment-industry explanations have also stressed that consumers are not intended to bear the MDR directly.
No UPI Day: What Mobile Retailers Want
The central demand from AIMRA is straightforward: merchant UPI transactions should continue under the Zero-MDR system.
The association says retailers support digital payments but want the payment ecosystem to remain affordable for businesses, particularly smaller retailers.
The October 2 protest is therefore focused on the cost of accepting eligible merchant UPI payments, rather than opposition to UPI itself.
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