Petrol pump owners warn of UPI payment ban above Rs 2000

Petrol pump operators are considering stopping UPI payments above Rs 2000, citing a new government rule. The issue has sparked debate not just in Mumbai but across Maharashtra and the country.

Under the new rule, any UPI payment above Rs 2000 will require the recipient to pay nearly Rs 5 as MDR, or Merchant Discount Rate. In simple terms, Rs 5 will be deducted for every transaction above Rs 2000. Reports say this charge will not be levied directly on customers. But with hundreds of people fuelling up at petrol pumps every day, even Rs 5 per transaction adds up to thousands of rupees a day and a significant burden over a month. Dealers have said clearly that if the charge comes into effect, they will simply stop accepting UPI payments above Rs 2000, and customers will have to pay in cash instead.

Petrol pump operators in Mumbai have told the government clearly that they should be exempted from this MDR. If the demand is not met, all UPI transactions above Rs 2000 will be stopped from October 15. This means that after that date, if a customer fills Rs 2500 worth of petrol and tries to pay via UPI, the pump will not accept it, and cash will have to be paid instead. It would be wise to start carrying some cash from now on.

Pump owners say they already earn very little commission on selling petrol and diesel. Despite repeated demands to the government to raise the commission, nothing has changed. They have asked how they are supposed to run their business if money is now going to be deducted on UPI payments as well, on top of already thin margins, saying the charge is simply not affordable. Monty Sehgal, spokesperson for the Federation of All India Petroleum Traders, said that if no exemption is given on payments above Rs 2000, UPI will not be accepted at all. Dealers in Karnataka have also written to the central government demanding exemption from this charge.

Notably, opposition to this decision is not limited to pump owners but has also come from within the ruling alliance. The industry cell of Ajit Pawar's Nationalist Congress Party has also opposed the decision. Manish Konde, state general secretary of the industry cell, wrote to Deputy Chief Minister Sunetra Pawar asking her to consider the interests of traders in Maharashtra. The letter stated that if UPI is charged, it will affect Digital India, raise questions over whether people should make online payments at all, that such a burden should not be placed on traders, and that the matter should be pursued with the central government.

Many find it hard to accept that the government promotes digital payments on one hand and charges for them on the other. It remains to be seen whether the government will withdraw the decision. Until then, it may be wise to carry cash while filling petrol, to avoid a dispute at the pump.