Federation of Manufacturers and Traders Associations of Tamil Nadu (FOMTA) has urged central govt to withdraw a proposed 0.4% fee on UPI transactions exceeding Rs2,000, which is set to take effect on Oct 15.
Citing an example, Ravichandran said, “A customer clearing an outstanding balance of several lakh in five instalments, with a Rs300 charge on each transaction, would cost the merchant Rs1,500 from business profits.
Under the proposed procedure, banks would deduct the fee from the account of the merchant receiving payments, whether the transaction involved consumers or other merchants, FOMTA president R Ravichandran said. Ravichandran said that the fee would impose an excessive burden on merchants already facing high commodity prices, intense competition, labour costs, rent, electricity bills, municipal taxes and market fluctuations. He also urged the govt to recommend withdrawing the proposal to the Union finance minister. He further warned that merchants and consumers could be forced to return to cash transactions if the charge was implemented. He added that merchants could consequently lose substantial sums annually.