Petrol pump dealers in Madhya Pradesh are planning to restrict UPI payments above Rs 2,000 from October 16 if the newly introduced merchant discount rate (MDR) on fuel transactions is not withdrawn. The move comes amid growing concerns among fuel retailers over the additional cost of digital payments.
Under the revised UPI framework coming into effect from October 15, fuel purchases above Rs 2,000 will attract a flat MDR of Rs 5 per transaction, while payments below Rs 2,000 will continue to remain free. Unlike regular high-value merchant transactions, which will attract a 0.4% MDR subject to a cap, fuel payments have been placed under a concessional flat-fee structure. The charge is to be borne by the merchant rather than the customer.
The All India Petroleum Dealers Association has sought a complete exemption for petrol pumps, arguing that even a small additional charge would put pressure on already narrow operating margins. In Madhya Pradesh, the dealers’ association has said its members could stop accepting UPI payments above Rs 2,000 from October 16 if the government does not reconsider the decision. The move could affect customers who regularly make high-value fuel payments through UPI, particularly those filling larger quantities of fuel or making payments for commercial vehicles.