Retailers protest UPI payment fees as startups eye IPOs

Indian retailers are set to observe a nationwide 'No UPI Day' on October 2, protesting the proposed Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions. Industry bodies have flagged concerns over margin erosion and potential annual costs amounting to ₹9,000 crore (approximately $1.1 billion USD) due to the new levy.

The framework, effective October 15, introduces a 0.4% MDR for P2M UPI payments exceeding ₹2,000 (about $24 USD), capped at ₹300 (about $3.60 USD). This marks the end of the zero MDR regime that has been in place since 2020. While the government suggests only 4% of merchant transactions will be affected, retailers argue the impact will be more significant, particularly for businesses operating on thin margins.

The Supreme Court recently refused to grant an interim stay on the MDR rollout, terming the issue 'more technical than legal'. However, the court has sought responses from the government, the Reserve Bank of India (RBI), and the National Payments Corporation of India (NPCI) regarding the nature of the levy within four weeks.

Fintech platforms and banks maintain that reintroducing MDR is crucial for funding India's digital payment ecosystem, estimated to cost ₹21,000 crore (about $2.5 billion USD) annually. They argue that MDR is necessary to cover rising operational costs, including hardware upgrades and cybersecurity measures, potentially generating ₹13,000-15,000 crore (about $1.6-1.8 billion USD) in new revenue.

In other corporate news, fintech firm Moneyview's initial public offering (IPO) was heavily oversubscribed. Snapdeal's parent company, AceVector, and defence tech startup Tonbo Imaging have also advanced their IPO plans. Used-car marketplace Cars24 expects to file for its IPO by April 2027. Ola Electric is raising up to ₹1,000 crore (about $12 million USD) through a rights issue. Assets worth ₹443 crore (about $53 million USD) belonging to gaming platform Gameskraft have been attached in a money laundering probe. OpenAI has paused training on its most capable models due to a security incident. Amazon India's businesses reported mixed financial results for FY26, with revenue growth but increased net losses in its retail segment. Agritech startup Balwaan Krishi raised ₹100 crore (about $1.2 million USD) in its Series B funding round.