Ajay Singh, president of the Madhya Pradesh Petrol Pump Dealers Association, announced that all pumps in the state will refuse person‑to‑merchant UPI transactions above ₹2,000 starting 16 Oct. The decision follows a new 0.4 % Merchant Discount Rate on such payments, a fee that could cost dealers up to ₹17,400 a month. The cap applies only to UPI payments; other payment modes remain unaffected.
Finance Minister Anurag Singh has ordered banks to ensure merchants do not pass the MDR onto customers. The ministry is working with payment aggregators to set up a real‑time monitoring dashboard that will flag any attempt to charge consumers the extra fee. On X, the Department of Financial Services denied that the MDR was imposed under external pressure.
Only about 4 % of total UPI volume will hit the new rate, according to ministry figures, so the government expects no major shift to cash. RuPay debit card transactions stay free, and the MDR cap of ₹300 for transactions above ₹75,000 limits the impact on big‑spend customers. Inflationary pressure from the fee is unlikely, sources say.
At a petrol pump in Indore, owner Ramesh Patel says the rule will protect his business from a sudden spike in costs. "If the fee hits my bottom line, I’ll have to raise pump prices," he told us, noting that many customers rely on UPI for their daily fill‑ups. The new cap may keep prices steady, but the real test will come after the monitoring kicks in.
The first test of the monitoring system will roll out on 20 Oct, with the finance ministry set to publish a compliance report by the end of November. Dealers who breach the rule could face fines, and UPI apps will be barred from adding separate platform charges. The industry watches closely as the policy balances consumer protection with merchant sustainability.