Retail, apparel bodies slam UPI fee ahead of festive season; fuel dealers seek exemption

Trade bodies say 0.4 pc MDR on merchant UPI deals above Rs 2,000 burdens thin margins, may undo digital gains; petrol dealers seek full exemption

A day after the government announced a 0.4 per cent fee on UPI merchant transactions above Rs 2,000, trade bodies across retail, apparel and fuel warned the move could derail digital adoption just as the festive season begins.

On Tuesday (September 15), ending nearly six years of fully free UPI payments, the government introduced a 0.4 per cent fee on transfers worth more than Rs 2,000 made to merchants through the platform from October 15, while explicitly ring-fencing everyday person-to-person transactions as well as small payments from any charge.

But it has triggered concern that merchants operating on thin margins may revert to cash, undermining the government’s own push for formalisation. Trade bodies argue that the policy undermines the government’s own digitisation agenda.

Together, the three associations highlight the risk that a uniform MDR could reverse hard-won gains in digital adoption across sectors.