UPI
Restaurants in Kolkata receive 30%-50% of their payments through UPI now, which could add up to a significant amount and prove to be a burden on their finances. Hotel and Restaurants’ Association of Eastern India (HRAEI) has asked members to wait for a month once the charge under Merchant Discount Rate (MDR) framework rolls out from Oct 15. It has convened a meeting on the issue on Sept 25. “While the UPI charge is a mere 0.4% with a Rs 300 cap on it, we fear a rise in ingredient prices since our vendors may choose to pass on the burden to buyers. The charge is a setback for the food and beverages sector where margins are lower than most sectors, said Shiladitya Chaudhury, owner and co-founder of Oudh 1590.
Kolkata: Even as restaurant bodies and eateries gauge UPI use and the rise in expenses due to the charge levied on merchants for transactions above Rs 2,000, many have decided to discourage customers from using the mode of payment to get around it.
This could eventually force a price rise, they said. Restaurant bodies said they plan to move Centre to roll it back. some argued that a price rise was the only viable solution While many said it could be a significant burden. We have asked our member restaurants to assess the expenses,” said Sudesh Poddar, president of HRAEI and owner of Songhai-Manthan and MS Bar & Lounge. Else, we will discourage UPI which may not be easy,” said Siddharth Kothari of Peter Hu. Charges for credit cards are often much higher, said some restaurant owners. UPI transactions form a significant part of our total sales, so an impact is not ruled out,” said Anirban Sengupta, owner of WhatsUp Café on Southern Avenue. “We don’t get GST inputs like others,” added Chaudhury.
It may not, however, come immediately since restaurants are keen to avoid passing on the burden to consumers during the pre-festive season when footfall starts spiking. “The charges will depend on the volume of UPI transactions, which is significantly high at the moment. So, restaurants with high footfalls can expect a substantial burden. It will be difficult unless we pass it on to customers but it will not happen till at least mid-Nov, if at all. A significant part of transactions at Peter Hu, Mocambo and Peter Cat on Park Street happens through UPIs. “The impact is going to be significant. UPI payments are by far the most widely used compared to cash, which is negligible, and credit cards which are far behind. If profit margins are affected, then a price rise will be inevitable. That may affect us majorly and force us to revise prices. But we will wait and watch for now. You Can Also Check: Gold Rate in Kolkata | Silver Rate in Kolkata | Bank Holidays in Kolkata | Public Holidays in Kolkata | Kolkata AQI | Weather in Kolkata | Petrol Price in Kolkata | Diesel Price in Kolkata | CNG Price in Kolkata | LPG Price in Kolkata
National Restaurants’ Association of India (NRAI) described the charge as ‘challenging’ for the food business and plans to move Union commerce and industry ministry to push for a rollback. “This will affect the entire food business in some way or the other. From the restaurants’ point of view, they might initially discourage UPI, which goes against the govt’s policy of a cashless economy. For now, we will take the hit and see how it goes.