Is October 2 'No UPI Day'? What you need to know as trade bodies, mobile retailers call off MDR protest

The proposed 'No UPI Day' protest on October 2, Gandhi Jayanti, has been called off by AIMRA and AICPDF after their meeting with FM Nirmala Sitharaman. Here's what the proposed 0.4% UPI MDR means, what retailers have sought and what customers should know.

The UPI Merchant Discount Rate (MDR) of 0.4% is set to apply from 15 October 2026 on specified merchant transactions above ₹2,000. The charge will be levied on the merchant and not directly on the customer making the UPI payment.

According to a PTI report, the All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF) on Wednesday withdrew their proposed 'No UPI Day' protest planned for October 2, after a trade delegation met Union Finance Minister Nirmala Sitharaman.

So, is October 2 (Gandhi Jayanti) still a 'No UPI Day'? Here's what customers need to know.

"The delegation, led by BJP MP and CAIT secretary general Praveen Khandelwal and AIMRA founder chairman Kailash Lakhyani, submitted a joint representation, seeking deferment of the proposed MDR, a phased implementation and changes in the threshold for its applicability."

The trade bodies also asked that merchant-to-merchant (M2M) transactions be kept outside the MDR framework. They further sought an expert committee to examine the concerns raised by the retail and distribution sectors.

For example, if a merchant has a ₹20,000 UPI transaction, a 0.20% MDR would amount to ₹40. If the rate rises to 0.25% the following year, the charge would be ₹50, and at 0.30%, it would be ₹60. At the proposed 0.40% rate, the MDR on a ₹20,000 transaction would be ₹80.

"It also sought to raise the proposed ₹1 lakh threshold for MDR applicability to ₹5 lakh, saying the move would take into account the transaction patterns of merchants," PTI reported.

Following the meeting, AIMRA and AICPDF decided to withdraw the October 2 protest. AIMRA had said the proposed MDR could put pressure on the "already thin" profit margins of micro, small and medium enterprises, shopkeepers and independent retailers that use digital payments for their daily transactions.

Therefore, customers should not assume that UPI payments will be unavailable at mobile retailers or other participating businesses because of the proposed protest. However, customers can check with the respective merchant before making a payment if they have any concerns.