A 0.4% merchant discount rate on UPI transactions above Rs 2,000 comes into effect on Oct 15
Mumbai: Mumbai’s petrol pump dealers have indicated that they are willing to withdraw their opposition to the levy of merchant discount rate (MDR) on UPI transactions if oil marketing companies (OMCs) agree to bear the 0.4% charge. Earlier, petrol pumps had to manage cash collections of Rs 50 lakh or more daily, count the money, and transport it to banks.
The shift towards digital transactions has significantly reduced the handling of large volumes of cash at fuel stations, according to him. He said UPI transactions have also eliminated concerns over counterfeit currency and eased operational hassles for fuel station operators. He said OMCs should follow the same model adopted for credit card payments, under which petrol pump owners receive the full amount paid by customers while the companies bear the transaction charges.
“UPI is beneficial for us. There have been instances of attacks and robberies in the past. Digital payments have reduced these risks substantially. Modi, however, maintained that dealers should not be forced to absorb the MDR burden on fuel sales, where margins are already thin.
Petrol Dealers Association president Chetan Modi on Friday said dealers are not opposed to digital payments and, in fact, strongly support the widespread use of UPI.