School bus operators across Maharashtra to stop accepting fee payments through UPI from October 15

The State Bus Owners` Association (SBOA) has sought an exemption for school buses, saying the additional cost makes UPI collection of school bus fees unviable. Representational Pic

Parents in Mumbai and across Maharashtra may have to switch from Unified Payments Interface (UPI) to cash, cheques or any other mode to pay their children's school bus fees from October 15, with the School Bus Owners' Association (SBOA) deciding to stop accepting UPI payments, citing the new charges on transactions above Rs 2,000.

The SBOA, a state-wide organisation representing school bus operators, in a circular on Thursday, said that school bus fees will no longer be accepted through UPI from October 15. The decision could affect a large number of parents who currently use digital payments to pay their children's transport fees.

The association said the decision was prompted by the new government rules under which payment gateways are charging Rs 200 per transaction for UPI payments above Rs 2,000. As school bus fees are generally above that threshold, the association said collecting six months' fees through UPI was not financially feasible.

"Please note that from 15th October onwards, School Bus Fees will NOT be accepted through UPI," the circular stated.

"Reason: As per new Govt. rules, payment gateways are charging Rs.200 per transaction for UPI payments above Rs.2,000. Since our bus fees are above Rs.2,000, for 6 months UPI collection is not feasible for us," it added.

Parents have been asked to pay the fees by cheque or credit card instead.

Why are school bus operators stopping UPI payments?

The move comes ahead of the implementation of Merchant Discount Rate (MDR) charges on specified UPI transactions above Rs 2,000 from October 15. The government has ruled out a rollback of the proposed 0.4 per cent MDR charge, with government sources saying a decision had already been taken and there was no question of reversing it.

The SBOA has sought an exemption for school buses, saying the additional cost makes UPI collection of school bus fees unviable.

SBOA President Anil Garg said the association had already approached the Union Finance Minister over the issue and posted on social media seeking an exemption for school buses, petrol pumps and spare-parts businesses.

"We have already emailed the Hon'ble Finance Minister and tweeted requesting that School Buses, Petrol Pumps and Spare Parts be treated as Essential Services and exempted from this charge," the circular said.

According to the association, its petrol pump and spare-parts vendors have already refused to accept UPI payments under the new arrangement.

The SBOA said it would be forced to stop UPI collection permanently if the requested exemption is not granted.