A local vegetable vendor at Prayagraj
UPI Merchant Discount Rate Implementation Sparks Cash Preference Among Traders
In Prayagraj, the upcoming implementation of a 0.4% Merchant Discount Rate (MDR) on UPI transactions over Rs 2,000 is prompting some traders to change their payment practices. With the MDR set to take effect on October 15, certain merchants are removing QR codes from their payment options and are now requesting that customers pay in cash for purchases exceeding the Rs 2,000 threshold. This shift reflects the immediate impact of the new fee structure on local business operations.
they warned that they may discontinue the facility once the new regime kicks in. ”UPI has become an integral part of daily business, especially for high-value purchases While a few said they were still accepting digital payments on request. We may have to switch back to cash for bigger amounts,” said a bullion trader in Chowk. A wholesale trader dealing in construction material said, “The govt encouraged traders and customers to shift to digital payments. Bank sources said they noticed higher withdrawals, though there was no immediate indication of a major shift from digital payments.
In Civil Lines, Chowk, Leader Road and other commercial hubs, some shopkeepers were seen discouraging UPI payments. If a charge is levied on every such transaction, it will directly add to our costs. We invested in QR-based payment systems and made UPI a regular part of business. It is difficult to understand why traders should now bear an additional charge.
Meanwhile, increased cash demand was visible at several ATMs in Civil Lines, Chowk and Leader Road on Friday and Saturday.