A new 0.4% UPI fee on transactions above Rs 2,000 is set to add to operating costs for merchants in Delhi’s Chandni Chowk from October 15, just as the market enters its wedding and festive season rush. Traders selling garments, footwear and other high-value goods say the charge will be difficult to avoid because most customers now rely on digital payments.
At Novelty Creations, where wedding clothes start at Rs 10,000, proprietor Rohit Khanna said nearly every sale would fall within the fee’s scope. “Almost all our products cost more than Rs 2,000 and everyone pays by UPI now. So, we will have to bear the charges,” he said, adding that rising expenses, inflation, personal income tax and GST were already affecting his margins.
Ajay Kumar Mittal, proprietor of a Lucknowi Chikankari store and secretary of the Chandni Chowk Sarv Vyapar Mandal, said the fee could become significant when applied across the market’s large volume of small-business transactions. “Some politicians say 0.4% is nothing. But in aggregate, for small traders like us, it is a huge number,” he said.
The option of returning to cash payments is not considered practical by several traders. A manager at another wedding garment store, identified as Rakesh, said customers rarely carry enough cash for high-value purchases. He also pointed to the limited number of functioning ATMs in Chandni Chowk and the queues outside them. “No one carries cash around these days,” he said.
Some customers may consider splitting large bills into multiple UPI transactions below the Rs 2,000 threshold, but traders said this would not be a workable solution. Mittal said customers faced daily limits on the number of transactions they could make, making repeated splitting difficult for larger purchases.
The reported fee has also raised concern about whether merchants will ultimately pass the cost on to customers. Traders said there had been discussions about a possible rollback before October 15, although Mittal expressed doubt that the measure would be withdrawn. He compared the development with the treatment of Merchant Discount Rate charges on credit card transactions, which he said merchants were required to bear.
Other traders offered a different view. Mouj Baluja, owner of Balujas Shoes, said the charge could be part of a broader effort to make the digital-payment system financially sustainable, but warned that the fee could become a larger burden if it rises over time.
Chandni Chowk Sarv Vyapar Mandal president Sanjay Bhargava criticised the timing, saying the charge should have been introduced with the next financial year and the Budget. He said the market had been recovering from a slowdown following the Red Fort blast last year and that the new cost would add to traders’ concerns. Traders’ associations and the government now have until October 15 to discuss possible changes to the fee.
