Proposed UPI Transaction Charges Raise Concerns Among Hyderabad Traders

A proposal to levy a Merchant Discount Rate (MDR) of 0.4% on UPI transactions exceeding ₹2,000 has sparked discussion among business owners. Under the proposal, the charge would be capped at ₹300 per transaction. Small merchants receiving payments of less than ₹1 lakh per month would reportedly be exempt under the P2PM category. The proposed charges have raised concerns about their potential impact on the use of digital payments, particularly among small businesses that rely on UPI for everyday transactions.

Some roadside vendors in Hyderabad say they may encourage customers to pay in cash or by cheque instead of using UPI if the MDR is implemented. Digital payments have become a convenient option for small traders, allowing them to accept money quickly without handling cash. However, merchants fear that additional transaction charges could affect their profit margins. The final decision on the proposal and the precise details of its implementation remain to be clarified.