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UPI Charges Impact: Pneucons to Stop Accepting UPI Payments from October 10, Find Out Why
- •Pneucons, an online marketplace for industrial goods, will stop accepting UPI payments from October 10, 2026.
- •The company claims the new MDR (Merchant Discount Rate) on UPI will wipe out a significant portion of their profits.
- •A 0.4% MDR will be introduced on some Person-to-Merchant (P2M) UPI transactions exceeding ₹2,000 from October 15, 2026, to be borne by the merchant.
- •According to Pritesh Lakhani, co-founder of Pneucons, the 0.5% commission will be reduced by approximately 94% due to MDR.
- •MDR will not be collected from customers, but it will significantly impact businesses with low-profit margins.
Key Questions Answered
Pneucons is discontinuing UPI payments because the new 0.4% MDR (Merchant Discount Rate) introduced on certain P2M transactions exceeding ₹2,000 will wipe out about 94% of their profit margins. Since the company earns a commission of approximately 0.5% before tax, paying this MDR along with applicable GST makes accepting UPI transactions financially unsustainable.
No, customers will not be charged any additional fees or MDR when making UPI payments. The MDR is a fee levied on the merchant side, and banks have directed that this cost burden must not be passed onto customers. Sending money to family and friends as well as general merchant checkouts will remain free for consumers.
Merchant UPI payments up to ₹2,000 carry a zero MDR. Small merchants and street vendors receiving up to ₹1 lakh per month via UPI QR codes also continue to enjoy zero MDR. For eligible transactions exceeding ₹2,000, a 0.4% MDR applies, which is capped at a maximum of ₹300 for transactions of ₹75,000 or more. Specific low-margin sectors like fuel have a flat ₹5 MDR for transactions over ₹2,000.
