Petrol Pumps Threaten UPI Payments Halt Over New Transaction Fees from October 15

Indian petrol pumps are set to stop accepting Unified Payments Interface (UPI) payments exceeding Rs 2,000 from October 15, unless the Centre waives a new transaction fee. This move by a national pump dealer body, backed by regional associations, comes as a direct protest against the recently introduced Merchant Discount Rate (MDR) on these digital payments. The impending deadline threatens to disrupt daily fuel purchases for millions of commuters and businesses across the country. The National Payments Corporation of India (NPCI) announced that effective October 15, UPI Person-to-Merchant (P2M) transactions above Rs 2,000 will attract an MDR. While most P2M transactions will incur a 0.4% charge, fuel purchases specifically face a flat Rs 5 fee for amounts over Rs 2,000, with transactions below this remaining free. Petrol pump dealers, operating on very thin, fixed margins set by Oil Marketing Companies, argue that even this seemingly small flat fee will significantly erode their profits, citing no revision in their commissions since 2017. This ends a six-year 'zero-MDR regime' where the government subsidized UPI transactions to boost digital adoption. The All India Petroleum Dealers Association (AIPDA) has urged the Finance Ministry and Ministry of Petroleum and Natural Gas for a complete exemption, engaging in discussions that are still ongoing. Should the waiver not be granted before October 15, consumers may be forced to rely more on cash for larger fuel payments, potentially slowing the push for digital payments, especially in rural areas. The coming days will be crucial to see if the government finds a middle ground to prevent widespread inconvenience and support the sustainability of both dealers and the UPI ecosystem.