0.4% UPI MDR: Traders Say They’ll Promote Cash. Will Festive Sales Take A Hit?

Sanjiv Mehra, president of the Khan Market Association, said traders were already opposing MDR on credit card transactions and would now have to deal with charges on UPI payments.

The government’s decision to introduce a 0.4% Merchant Discount Rate (MDR) on certain UPI merchant transactions above Rs 2,000 has triggered concern among traders, with several associations warning that the additional cost could push businesses to encourage cash payments ahead of the festive season.

The new framework, which ends the zero-MDR regime for specified high-value merchant transactions, has come into effect as retailers and traders prepare for one of the busiest shopping periods of the year. The MDR will be capped at Rs 300 for transactions of Rs 75,000 and above.