New Delhi: Petrol pump operators could stop accepting UPI payments above ₹2,000 if a Merchant Discount Rate (MDR) is introduced on such transactions, traders’ organisation Chamber of Trade and Industry (CTI) has warned.
The organisation said most payments at petrol pumps are already above ₹2,000, meaning any additional charge could put further pressure on operators working with narrow margins.
CTI Chairman Brijesh Goyal said several petrol pump operators had told the organisation that they were already struggling with MDR charged on credit card transactions. According to him, extending such charges to UPI payments could increase their losses further.
Most Petrol Pump Bills Exceed ₹2,000
Goyal said filling a car’s tank with petrol can result in a bill of around ₹3,000 to ₹5,000, while a truck’s diesel bill can exceed ₹10,000. As a result, he said, a large share of transactions at petrol pumps are above the ₹2,000 threshold.
Petrol pump operators, according to Goyal, already work with a margin of around ₹3-4 per litre. If they are also required to pay 1% MDR on UPI transactions, he said, the additional cost could push them into losses.
The concern comes as traders oppose any proposal to impose a charge on UPI transactions above the specified amount.
Petrol Pumps Could Restrict UPI Payments Above ₹2,000
Goyal said petrol pump associations had told CTI that operators were already facing difficulties because of the 0.8% to 1% MDR charged on credit card payments.
According to the CTI chairman, if a similar MDR is imposed on UPI transactions, petrol pump operators could be forced to stop accepting UPI payments above ₹2,000.
CTI said petrol pumps could even put up notices stating, “UPI above ₹2,000 will not be accepted”. The organisation said such a move would ultimately create difficulties for consumers who increasingly rely on digital payments.
CTI Warns Of Possible Impact On Customers
CTI General Secretaries Gurmeet Arora and Ramesh Ahuja said there should be no charge on UPI payments above ₹2,000. They said the government may maintain that the proposed charge would be collected from merchants rather than customers, but argued that businesses could eventually recover the additional cost from consumers in some form.
The organisation has therefore opposed the introduction of MDR on higher-value UPI transactions, saying the additional financial burden could affect both merchants and consumers.
CTI said the issue is particularly significant because of the widespread use of UPI across markets in Delhi.
CTI Says Over 70% Traders In Delhi Markets Use UPI
According to CTI, more than 70% of traders in markets including Chandni Chowk, Kashmiri Gate, Sadar Bazaar, Kamla Nagar, Lajpat Nagar, Chawri Bazaar, Connaught Place, Karol Bagh, Gandhi Nagar, Sarojini Nagar and Rajouri Garden accept UPI payments.
The organisation said imposing MDR could disrupt the existing digital payment system and potentially push consumers and traders back towards cash transactions.
CTI has called for UPI and RuPay payments to remain completely free of MDR. Goyal said the organisation would launch a protest if the government imposed such charges on traders.
