UPI Payments: The traders from Delhi have resorted to putting up “Cash Only’ banners at their stores in a bid to protest the recent imposition of charges by the government on the use of UPI payment systems. This is because of the recent introduction of a Merchant Discount Rate (MDR) charge of 0.4% for transactions via UPI that exceed Rs 2000, which will be implemented from October 15 onwards.
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Why are traders protesting against the new charge on UPI?
Up till now, traders have enjoyed making UPI transactions free of merchant fee. However, the new MDR policy has generated concern among traders in Delhi who operate on thin profit margins. Merchants feel that such an extra cost might demotivate other merchants to continue using this payment medium.
‘Cash Only’ signage found at Delhi shops
As a result, traders in various markets in Delhi have started removing and replacing the signage of UPI payments with cash payment notices as a form of protest against the new MDR policy.
Traders seek a review of the policy
Trader associations have called for the MDR framework to be reconsidered, arguing that the new charge could affect both merchants and customers. Delhi market representatives have also indicated plans for further protests against the policy.The development highlights the tension between maintaining UPI as a widely accessible digital payment system and creating a sustainable revenue model for its payment ecosystem. The government and payment authorities have said the MDR is intended to support the long-term financial sustainability and expansion of UPI, while critics fear it could encourage some merchants to return to cash.
