Risk Of India Returning To Cash Economy: Retailers’ Body On UPI Fee
Sounding an alarm over the new charge on some UPI transactions over Rs 2,000, the Retailers Association of India has said that the decision carries the risk of India returning to a cash economy.
“Small merchants will now think twice about whether to accept cash or UPI,” Kumar Rajagopalan, the CEO of the association, which represents organised retailers, said on Wednesday.
Rajagopalan pointed out that such merchants often operate on razor-thin margins and even a small charge could affect their openness to accepting UPI payments.
The UPI system had been free for six years, encouraging its speedy adoption, until the National Payments Corporation of India (NPCI) announced on Tuesday that while all transactions will remain free for consumers, some payments over Rs 2,000 will attract a Merchant Discount Rate (MDR). The fee will be 0.4% for consumer-to-merchant transactions over Rs 2,000 (approximately Rs 8 for an amount of Rs 2,001) and a flat rate of Rs 5 for sectors like railways, telecom services, insurance, and fuel.
