Retailers warn 0.4% UPI fee ahead of festive season could push small merchants back to cash

The Retailers Association of India (RAI) on Wednesday warned that the government’s decision to impose a 0.4 per cent Merchant Discount Rate (MDR) on certain UPI merchant transactions could push small retailers back toward cash and undermine digital payment adoption ahead of the festive season.

The government on Tuesday introduced the charge, ending nearly six years of fully free UPI payments. The 0.4 per cent MDR will apply from October 15 to merchant transactions above Rs 2,000, while person-to-person transfers and small payments will remain outside its ambit.