CHENNAI: Several gas agencies in Chennai are refusing to accept UPI payments when delivering LPG cylinders under the cash on delivery (COD) mode, citing the merchant discount rate (MDR) introduced by the Union government on UPI transactions above Rs 2,000, even as the MDR rollout has been postponed until after Deepavali.

"I always opt for cash on delivery when booking a cylinder. And I always paid through UPI by scanning the QR code on the delivery person’s mobile phone. However, now they refuse to accept UPI payments and insist on payment by cash, citing the new MDR rule,” said N Anitha, a resident of Kodambakkam.

Gas agencies say they are reluctant to accept digital payments during deliveries due to the MDR fee imposed on UPI transactions.

Agencies have advised consumers to make payments online while booking cylinders to avoid difficulties during delivery. "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," said Mohan, an employee of a gas agency.

The Union government has fixed a flat fee of Rs 5 on UPI transactions exceeding Rs 2,000 in essential services including railways, fuel, telecommunications and insurance. UPI payments remain free for the end consumer, and merchants are prohibited from passing the fee directly to the customer.