Traders’ association says MDR won’t change consumer behaviour, UPI will continue to rule
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Nagpur: “Chillar” or “change”, the commonly used terms for coins and notes of smaller denominations, could return from oblivion if merchants turn to cash transactions after Merchant Discount Rate (MDR) charges on UPI transactions kick in from Oct 15.Several shop owners have already started preparing for a possible return to cash — and the perennial hunt for change. For many, the bigger challenge is not handling cash but ensuring a steady supply of Rs10, Rs20 and Rs50 notes and coins.A merchant in Nagpur’s bustling Sitabuldi commercial market said sourcing change would be the biggest problem. “Our go-to source earlier would be the bank, from where we would get bundles of Rs10, Rs20 and Rs50 notes. You could also get coins of all denominations, neatly stacked and wrapped in paper, from the bank. But after Covid, this practice stopped because consumer behaviour had changed,” he said.Another shop owner said around 97% of his customers currently pay through UPI. “If suddenly those 97% shift back to cash, then facilitating change for them will be a big challenge, as it is not easy to get smaller denomination notes now,” he said.A unique source of change was once beggars, who would hand over coins and smaller denomination notes to middlemen or shopkeepers for a nominal mark-up. The Sitabuldi merchant recalled that this was a regular practice until about a decade ago.“There used to be a couple of men who collected change from beggars and gave them 0.5% extra. From shop owners they would charge 1%, but that was a long time back and we used that option only in an emergency since banks would provide a steady supply,” he said.While traders are preparing for a possible shift towards cash, Confederation of All India Traders (CAIT) believes UPI charges may not significantly alter consumer behaviour. “Consumer wants convenience, even if it comes with a small fee. Online shopping platforms and food delivery apps are the perfect examples. They charge consumers under categories like platform fee, handling fee, delivery fee etc. Still people are using such platforms,” CAIT president BC Bhartia said.
