Some Ujjain Traders Stop Large UPI Payments Ahead of 15 October MDR Deadline, Customers Scramble for Cash

From 15 October, a Merchant Discount Rate (MDR) will apply to select merchant UPI payments above ₹2,000. The news has already begun affecting the market in Ujjain. Several traders have stopped accepting large UPI payments, directly impacting customers who step out relying on mobile payments and often do not carry cash. Customers arriving at shops that no longer accept UPI have had to leave without making purchases, with some forced to withdraw cash from an ATM before returning to complete their shopping. Traders say the monthly cost of accepting numerous such payments could rise, so they are trying to get customers used to paying in cash ahead of the deadline.

Payment Methods Already Changing

Some traders in Ujjain's electronics, garment, mobile phone, automobile and other large trades have begun limiting or stopping UPI payments above ₹2,000. Traders argue that even a small percentage charge can add up to a significant monthly amount given the high volume of such payments daily. They say they will not be able to charge customers separately for this, so the cost would directly affect business expenses. To get customers into the habit, some shops have already started prioritising cash payments. According to some traders, the potential daily cost from a high volume of large UPI transactions could reach ₹400 to ₹500. Traders estimate this could add up over a month to an amount equal to or greater than an employee's salary — though the actual cost will depend on the business, eligible transactions and the applicable charge conditions. Traders say it is this potential additional expense that has led them to start prioritising cash or other payment methods for large transactions.

Customers Say UPI Is a Daily Necessity

The inconvenience for customers is mounting because UPI payments have become part of everyday shopping. Many people no longer consider it necessary to carry cash when leaving home, relying instead on mobile payments. As a result, when they learn a shop is not accepting UPI, they are forced to turn back. Virendra Singh Rana, who had gone to buy clothes, said that after becoming used to UPI for both small and large purchases, suddenly having to revert to cash payments is inconvenient. He said the new system being adopted by traders means customers now have to ask about the accepted payment method in advance.

Traders Say Daily Large Payments Will Raise Costs

Garment trader Sandeep Jain said several large UPI payments are made at his shop every day. If a charge applies to every eligible payment above ₹2,000, the monthly cost could rise considerably, which he said is not a small amount for a trader to absorb. He said this is why his shop has already begun prioritising cash for large payments, and customers are now being informed in advance to bring cash for bigger purchases.

Traders Say They Are Getting Customers Used to Cash Payments Early

Wholesale fruit seller Shahzad Lala said that if the payment method changes suddenly after 15 October, it will cause difficulty for both customers and traders. He said this is why cash is already being accepted for large payments at his shop, adding that the intention is not to inconvenience customers but to avoid the potential additional cost. He said customers will gradually come to understand that carrying cash or an alternative payment method may be necessary for larger purchases.

Traders Say New Rules Will Cause Difficulty During Festive Season

Grocery trader Saransh Rathore said the new rule from 15 October is coming into effect at a time when festive-season shopping typically increases and people go out to make larger purchases. He said a sudden change in the status of UPI payments could cause difficulty for customers, which is why traders are informing customers in advance to keep cash or alternative payment options ready, so they do not have to visit an ATM or return without making a purchase during the festive shopping period.