Ghaziabad Traders Reject UPI Over New MDR
Traders in Ghaziabad have begun displaying notices saying they will stop accepting UPI payments as they protest the new Merchant Discount Rate (MDR) scheduled to apply to selected high-value merchant transactions from October 15. Several shops are instead asking customers to prepare to make payments in cash.
Ghaziabad Shops Put Up ‘Cash Only’ Notices
Notices stating that UPI payments will not be accepted have appeared at shops in areas including Vijay Nagar, Pratap Vihar, Gaushala Fatak and Crossings Republic.
Traders dealing in jewellery, groceries, beauty services and other businesses have raised concerns that the additional transaction cost could reduce already narrow margins. Some merchants said purchases exceeding Rs 2,000 are common in their businesses, making the new charge particularly relevant to them.
UPI MDR to Apply Above Rs 2,000
From October 15, a standard 0.4% MDR will apply to specified person-to-merchant UPI transactions above Rs 2,000. The charge will be borne by merchants rather than customers and will be capped at Rs 300 for transactions of Rs 75,000 and above.
Person-to-person UPI transfers will remain free, while merchant payments of up to Rs 2,000 will continue under the zero-MDR framework. Small merchants meeting the prescribed exemption criteria will also remain protected from the charge.
Traders Fear Shift Back to Cash
Shopkeepers argue that absorbing MDR would add to operating costs, while passing it on to customers is not permitted under the framework. Some have therefore indicated that they may prefer cash for higher-value transactions.
The Ghaziabad protest comes as retailer and distributor groups across India seek reconsideration of the MDR framework, warning that additional payment costs could discourage businesses from accepting UPI for larger purchases.
