Agra/Aligarh/Muzaffarnagar/Meerut: Traders, shopkeepers and business owners across western Uttar Pradesh have strongly opposed Centre’s proposed 0.4% Merchant Discount Rate (MDR) on UPI transactions above Rs 2,000, which is set to take effect on Oct 5.
Similarly, Haresh Agrawal of Federation of Udyog Vyapar Association warned that with mid-sized shops operating on razor-thin margins of just 2 to 3 per cent, the deduction would directly hit profitability. Sushil Kumar Jain, president of Noida’s Sector 18 Traders Association, warned that traders could effectively end up paying MDR twice—once when receiving customer payments and again when paying suppliers digitally. Bulandshahr petrol pump owner Prashant Garg estimated that the charge could cost him nearly Rs 4 lakh annually, given that over 60 per cent of his sales are processed via UPI. Chhavi Garg, vice-chairperson of a private university, called for a complete exemption for education payments since 80 per cent of student fees are now paid digitally. Hapur jeweller Sachin Jindal noted that even modest items like silver anklets frequently cross Rs 2,000, meaning the added MDR on top of 3 per cent GST would squeeze merchants further.
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“The proposed levy is unfair,” said Naresh Pandey, president of Udyog Vyapar Pratinidhi Mandal in Agra. Business leaders criticised the move, arguing it “penalises them after years of successfully weaning customers off cash. TN Agrawal of Agra Vyapar Mandal warned the charge would add to inflationary pressures and slow down business. He urged govt to reconsider the move. Muzaffarnagar grocer As Mohammad voiced his frustration, stating, “I would rather deal in cash or pass the charge directly to customers to protect my slim margins. Sector-specific concerns have further amplified the pushback. He suggested that govt subsidise digital payments instead. Medicine trader Garvit Kharbanda added that small pharmacies handle enough UPI volume to feel the pinch. Several traders also highlighted what they see as a contradiction with govt’s Digital India initiative. Sports goods exporter Iqbal Singh of Meerut cautioned that pushing customers back toward cash or cards could create friction at billing counters, while fellow trader Naveen Kumar feared that price hikes intended to offset the fee could drive shoppers toward online e-commerce platforms instead. Not all business owners anticipate catastrophic losses, and reactions to handling the costs vary. Pankaj Khandelwal, who runs a lock-making unit in Aligarh, felt the bigger inconvenience would be switching back to cheques if customers refuse UPI, involving extra time and bank visits. Meanwhile, Meerut medical store owner Aniruddh Singh noted that while the deductions would add up over time, he would not pass the cost to loyal customers. He recalled an instance where a buyer pointed out that the fee was meant for the merchant, not the buyer. Download the TOI App.