‘They forced us to use UPI, now they’re charging us’: Chandni Chowk traders

The traders’ concerns come ahead of October 15, when the new fee on UPI transactions above Rs 2,000 takes effect.

Novelty Creations, a wedding store in Chandni Chowk, Old Delhi’s wedding hub, sells a wide range of lehengas, sherwanis and sarees starting at Rs 10,000.

With the festive and wedding season approaching, proprietor Rohit Khanna was hoping for a good run of business. But the announcement of a 0.4% fee on UPI transactions above Rs 2,000 has taken some of the shine off those expectations.

With most of his customers now paying by UPI, Khanna said the Merchant Discount Rate (MDR) will become an additional cost for his business. “All our products cost more than Rs 2,000 and everyone pays by UPI now. So, we’ll have to bear the charges. Along with the competition, a businessman’s primary obstacle to growth is the government,” he grumbled.

From October 15, UPI transactions over Rs 2,000 will attract a fee of 0.4%, as announced by the National Payments Corporation of India.

Ajay Kumar Mittal, proprietor of a Lucknowi Chikankari store, echoed Khanna’s complaint. “Initially, they forced us to shift to UPI. Now, 10 years later, they have levied charges. Some of the politicians say ‘0.4%’ is nothing. But in aggregate for small traders like us, it’s a huge number.”

For Khanna, the new charge comes on top of rising costs. He said the growth in his business income over the years has been “severely disproportionate” to his expenses.

“Our expenses are increasing every day. There’s inflation, personal income tax, then the GST and now this,” he said.

While there have been murmurs about possibly switching back to cash transactions, Rakesh, a manager at another wedding garment store in the area, said that asking customers to make the switch is impractical.

“No one carries cash around these days. And even if we ask our customers to get the money from ATMs, most of them don’t work in Chandni Chowk and there’s always a huge queue in front of the very few that do,” he said.

Some said they are still hopeful of a change in the government’s stand on the matter in the course of the month till this directive takes effect.

“One month will be more than enough time for the traders associations and the government to come to a consensus and make some changes,” said a hopeful Anoop Goyal, who runs Anand Garments.

Sanjay Bhargava, President of Chandni Chowk Sarv Vyapar Mandal, said the timing was “unfortunate”.

“The government could have introduced this in the next financial year along with the budget. The market has been in a slump since the Red Fort blast last year, and just when things were picking up, the government has added to our problems,” he said.