Several LPG agencies in Chennai are refusing to accept UPI payments at the time of cylinder delivery under the cash-on-delivery option, citing the merchant discount rate (MDR) applicable to certain UPI transactions above Rs 2,000. The payment disruption is being reported even though the rollout of the charge has been postponed until after Deepavali.
The refusal is affecting consumers who previously paid delivery personnel by scanning QR codes on their mobile phones. N Anitha, a resident of Kodambakkam, told DT Next that she normally selected cash on delivery while booking a cylinder and completed the payment through UPI when the cylinder arrived. She said agencies are now insisting on cash and referring to the new MDR rule.
Gas agencies have said they are reluctant to accept digital payments during deliveries because of the fee. The issue arises at the final stage of the LPG supply chain, where consumers receive cylinders at home and make payment directly to the delivery staff. Agencies have advised consumers to complete payment online while booking their cylinders instead.
“If consumers pay in advance while booking their cylinders, neither the consumer nor the delivery staff will have to face unpleasant situations at the time of delivery,” Mohan, an employee of a gas agency, said.
The Union government has fixed a flat fee of Rs 5 on UPI transactions above Rs 2,000 for essential services, including railways, fuel, telecommunications and insurance, according to the report. UPI payments remain free for consumers, while merchants are not permitted to pass the charge directly to customers.
The reported practice therefore creates a distinction between the formal payment rule and the way transactions are being handled at delivery points. While consumers are not supposed to be charged the fee directly, agencies that do not want to absorb it may refuse to process the payment during delivery and ask households to pay in advance or use cash.
For LPG users, the immediate choice is between making an online payment during the booking process, carrying cash for delivery or dealing with the agency if a digital payment is refused. The report does not specify how many Chennai agencies have adopted the cash-only approach, whether all distributors are following the same practice or how oil marketing companies have responded.
The MDR rollout is expected to be postponed until after Deepavali, but the reported refusals show that consumers are already encountering changes in payment practices. Further clarity would be required from the concerned oil marketing companies or authorities on whether delivery agencies can decline UPI payments under the cash-on-delivery option and how consumers should proceed when digital payment is unavailable.
