Prayagraj: The proposed Merchant Discount Rate (MDR) on UPI is already altering the way business is done in some city markets, with a section of traders removing QR codes and asking customers to carry cash for purchases above Rs 2,000. The 0.4% MDR on eligible UPI merchant transactions exceeding Rs 2,000 is set to come into effect from Oct 15.In Civil Lines, Chowk, Leader Road and other commercial hubs, some shopkeepers were seen discouraging UPI payments. While a few said they were still accepting digital payments on request, they warned that they may discontinue the facility once the new regime kicks in. ”UPI has become an integral part of daily business, especially for high-value purchases. If a charge is levied on every such transaction, it will directly add to our costs. We may have to switch back to cash for bigger amounts,” said a bullion trader in Chowk.A wholesale trader dealing in construction material said, “The govt encouraged traders and customers to shift to digital payments. We invested in QR-based payment systems and made UPI a regular part of business. It is difficult to understand why traders should now bear an additional charge.”The concern is particularly strong among traders dealing in jewellery, electronics and construction material, where individual bills frequently exceed Rs 2,000. The MDR will be paid by merchants and is capped at Rs 300 for transactions of Rs 75,000 and above.Meanwhile, increased cash demand was visible at several ATMs in Civil Lines, Chowk and Leader Road on Friday and Saturday. Bank sources said they noticed higher withdrawals, though there was no immediate indication of a major shift from digital payments.National Industry Trade Board, state convener, Manish Kumar Gupta urged traders to clearly display available payment options and said that customers should not be charged extra for UPI payments.Several trade bodies, including the Allahabad Galla Tilhan Vyapar Mandal, have opposed the proposed MDR and warned that traders would be forced to remove QR codes if the decision is not rolled back.
