Jaipur: Traders in Rajasthan are weighing how to absorb the additional cost of UPI transactions above Rs 2,000 under the new Merchant Discount Rate (MDR) regime, set to take effect from Oct 15, with many saying narrow margins leave them little room to take on another charge.“Most traders work on fixed margins, and there is very little scope to absorb an additional cost. Passing the cost on to customers appears to be the only option. Still, we have to see how it can be done technically,” said Federation of Rajasthan Trade and Industry president Suresh Agarwal.He urged the govt to reconsider the decision.Several traders, however, said they cannot simply add a separate UPI charge to customers’ bills. Centre’s guidelines do not allow MDR to be passed on separately, forcing merchants to either absorb the cost or factor it into overall pricing.Confederation of All India Traders (CAIT), Rajasthan, general secretary Hemant Prabhakar said the move could push some consumers back to cash, especially in sectors where UPI has become the preferred mode of payment.Additionally, the burden of the UPI fee is likely to be uneven.Kirana stores and neighbourhood retailers may see limited impact because many transactions remain below Rs 2,000. Businesses dealing in garments, electronics, jewellery, furniture, hospitality, tourism and automobiles, however, are likely to encounter the new charge more often because of higher-value payments.MD of the grocery retail and packaged food company Kirana King, Anoop Kumar Khandelwal, said UPI platforms should explore revenue through branding and advertising instead of charging small merchants on high-value transactions.Trade bodies are also seeking clarity on the exact mechanisms of levying the new charge, including merchant classification and monthly exemption thresholds. Jaipur Vyapar Mahasangh has opposed the Centre’s move and sought continuation of free UPI payments, warning that the added cost could increase pressure on small and medium businesses.Jaipur’s retail and trading markets, along with commercial centres in Jodhpur, Kota, Udaipur and Ajmer, have seen wide adoption of digital payments for both retail purchases and business transactions.For smaller retailers, the impact will depend on the value and frequency of UPI payments. Traders, however, said even a small MDR, if applied repeatedly, could raise monthly transaction costs for businesses already operating on narrow margins.Some traders are now examining whether customers can be encouraged to use cash or other payment modes for larger purchases.GfxWhat it means for Raj traders* Traders say margins largely fixed, leaves them little room to absorb additional cost* Jewellery, electronics, furniture, automobiles, garment businesses may see bigger impact as average bills higher* Jaipur’s jewellery, textile, electronics markets could see larger share of transactions affected by UPI charge* Hotels, restaurants, handicraft stores, other tourism businesses also handle relatively high-value digital payments* Some traders fear customers may shift to cash for purchases above Rs 2,000 to avoid additional costs* Even small charge may add up to large sum for businesses handling hundreds of high-value UPI transactions monthly* Impact likely to vary across sectors depending on transaction values, volumes and applicable exemptions
