Hyderabad: TPCC spokesperson Syed Nizamuddin and Hyderabad district Congress committee president Syed Khalid Saifullah on Wednesday demanded an immediate rollback of the new Merchant Discount Rate (MDR) on higher-value UPI merchant transactions, warning that the additional payment cost could move through the wholesale-retail supply chain and ultimately affect traders and consumers.
The TPCC spokesperson said the Centre’s 96% figure told only part of the story, as a relatively small number of higher-value merchant transactions represented a much larger share of the money changing hands. A ₹20,000 eligible transaction would attract ₹80 MDR, while a ₹50,000 transaction would attract ₹200. He said similar concerns applied to Laad Bazaar, where bridal and festive purchases could cross ₹2,000, and Pathergatti, where pearls and jewellery involved higher-value transactions.
Addressing a news conference at Gandhi Bhavan, Nizamuddin said a trader facing the new expense would either have to absorb it by cutting margins, reduce discounts, adjust prices or begin preferring cash for higher-value transactions. He said the issue was particularly important for Hyderabad, where digital payments had become deeply embedded in everyday commerce. Nizamuddin said this was particularly relevant to Begum Bazaar, where wholesalers routinely handled larger invoices on thin margins. It is a bazaar issue, a trader issue, a karigar issue and a tourism-economy issue,” Nizamuddin said.
“Merely saying that the consumer will not be charged MDR does not settle the economic question. If the merchant has to bear a new cost on every eligible higher-value UPI sale, who eventually absorbs that cost?” he asked. Hyderabad’s textile, handicraft, hotel and tourism sectors could also be affected, he added. “In Hyderabad, this is not merely a fintech issue.
The TPCC spokesperson acknowledged that maintaining the UPI network, cybersecurity and payment infrastructure involved expenditure but said the policy question was how those costs should be distributed. “The Centre should explain why small and traditional businesses above such a low threshold should become the source of that funding,” he said. The Centre has maintained that MDR is not a tax and is intended to ensure the long-term sustainability and expansion of the UPI ecosystem.