India
oi-Gaurav Sharma
A proposed change in the way customers pay for fuel could be on the cards, with petrol pump dealers objecting to the proposed charges for UPI transactions.
Dealers of Madhya Pradesh, and other areas, have suggested that they could stop accepting UPI payments above Rs 2,000 from October 15, if their request for exemption from the proposed Merchant Discount Rate (MDR) is not met.
Madhya Pradesh petrol pump dealers may halt UPI payments over ₹2,000 from October 15, objecting to a proposed 0.4% Merchant Discount Rate (MDR) due to increased costs. Associations like AIPDA and CAIT support dealers’ demand for an MDR waiver on UPI fuel transactions.
The proposed MDR is 0.4%, which dealers have stated would add to their costs. They are requesting for a complete exemption on UPI payments made at petrol pumps.
For motorists, the matter is of great interest, given the popularity of the UPI system for the payment of fuel. If the proposed restriction is enforced at participating outlets, customer making UPI payments above Rs 2,000 would be asked to instead use cash, debit or credit card, or another means of payment.
The objection of the dealers is primarily over the additional cost of the processing of digital payments. They have indicated that operating expenses have increased, but fuel commissions have remained constant, and that it is harder to bear another transaction expense.
The All India Petroleum Dealers Association has supported the demand for a full MDR waiver on UPI payments at petrol stations. Dealers of Madhya Pradesh have also demanded that fuel sales be exempted from the proposed charge.
The issue has also been raised by the Confederation of All India Traders (CAIT), who have voiced concerns over the likelihood of petrol pumps refusing UPI payments above the Rs 2,000 threshold.
As it stands, the proposed change is a matter of concern for both dealers and customers. For dealers, the focus is on the transaction costs. For customers, the bigger matter is whether they will continue to have the freedom to make larger fuel payments using UPI.
If the proposed restriction is enforced, motorists may need to check the payment options at petrol pumps before making large-value fuel purchases.
