Amid the ongoing chaos over the Merchant Discount Rate charges on UPI payments, representatives of the Petroleum Dealers Association on Thursday held a meeting with officials of the Petroleum Ministry, urging exemption from the charges on UPI transactions on fuel sales at petrol pumps.
During the meeting, concerns were raised over the MDR charges on UPI transactions made above Rs 2,000.
“Petroleum dealers have been at the forefront of adopting digital payments and have worked closely with the government to promote their use across the country,” the AIPDA said.
The body issued a statement saying it is open for a dialogue.
“We look forward to continuing the dialogue towards a mutually beneficial solution for consumers, petroleum dealers, and all stakeholders in India’s UPI ecosystem,” the statement said.
Over a period of time, digital payments have become the widely used mode of transaction at petrol pumps, particularly for high-value purchases.
Citing the nature of their business and the impact MDR will have, petroleum dealers have sought an exemption for fuel retail transactions.
The Finance Ministry has earlier clarified that the MDR is neither a tax nor a charge collected by the government or NPCI. It is an amount that is distributed among the payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem.
However, transactions above Rs 2,000 in essential and thin-margin sectors like railways, telecommunication, insurance, and agriculture inputs will attract a flat MDR of Rs 5 per transaction. The flat charge will provide cost certainty for critical public services and businesses operating on narrow margins.