Retailers across India will cover their UPI QR codes with black cloth and refuse UPI payments on Oct 2, 2026, as AIMRA protests a 0.4 % MDR that would hit merchants processing above Rs 2,000.
The proposed fee, introduced on September 15 and effective from October 15, caps at Rs 300 for transactions of Rs 75,000 or more, and will cost small retailers between Rs 2,000 and Rs 12,000 a month, according to AIMRA's estimate of a Rs 40 crore monthly burden.
Finance Minister Nirmala Sitharaman said the charge would be borne by merchants, banks and POS vendors, not consumers, and that the money would not go to the government.
A Indian Banks’ Association plans a mechanism to prevent merchants from shifting the cost to customers, while the Confederation of All India Traders will engage with the ministry on safeguards.
A A petition filed in the Supreme Court challenges the MDR on grounds of lack of statutory safeguards and public consultation; the court will hear it on October 15.
AIf the court upholds the fee, the move could reshape the UPI ecosystem, prompting merchants to reconsider digital acceptance and possibly driving a shift back to cash or alternative payment methods.