UPI charges on transactions above Rs 2,000 have triggered opposition from Delhi’s Chamber of Trade and Industry after the Centre notified changes to the Payment and Settlement Systems Act, with traders warning that the cost could eventually be passed on to customers.
According to a Gazette notification cited by Live Hindustan, the government has retained a complete prohibition on charges for UPI payments up to Rs 2,000 and for payments made through RuPay debit cards. The notification reportedly states that banks and system providers cannot impose a direct or indirect charge on a person making or receiving payments through these modes within the protected categories.
The notification does not mean that a charge has already been imposed on every UPI transaction above Rs 2,000. However, the reported changes have been interpreted by trader organisations as opening the way for a merchant discount rate, or MDR, on higher-value UPI payments.
Brijesh Goyal, chairman of the Chamber of Trade and Industry, opposed any such charge. He said a fee should not be imposed on UPI payments above Rs 2,000, arguing that merchants would have limited ability to absorb the additional cost.
Goyal said that if a merchant paid even 1 per cent MDR on a Rs 2,000 purchase, the direct cost would be Rs 20. According to him, businesses could respond by asking customers to pay in cash or by raising the price of goods. The trader body therefore argues that a charge formally collected from merchants could still increase the effective burden on consumers.
The concern is particularly significant for small businesses operating on narrow margins. CTI said sectors such as electronics, mobile phones, clothing, jewellery, furniture and wholesale trade commonly involve transactions above Rs 2,000. It added that many small and medium-sized traders work on margins of 1 to 2 per cent, leaving little room to absorb a payment fee.
The organisation also warned that larger UPI transactions account for a substantial share of payment value. Goyal cited the government’s reported position that transactions above Rs 2,000 represent about 4 per cent of the total number of transactions but 66 per cent of their value. This distinction means that a policy affecting higher-value payments could have a limited numerical reach but a wider impact on commercial transactions.
CTI said UPI has become the dominant payment method in several Delhi trading centres, including Sadar Bazaar, Chandni Chowk, Lajpat Nagar, Chawri Bazaar, Kamla Nagar, Karol Bagh and Gandhi Nagar. The organisation claimed that around 90 per cent of payments in these markets are made through UPI, although the report does not provide transaction records or an independent methodology for this estimate.
The trader body said merchants could display notices refusing UPI payments above Rs 2,000 if MDR is introduced. That would create a practical divide between low-value and higher-value digital payments, particularly in markets where customers use UPI for purchases ranging from household goods to business supplies.
CTI has asked the government to keep both UPI and RuPay debit card payments fully free of MDR, as it said they have been since 2020. If banks and payment-system operators face higher costs, the organisation has urged the government to compensate them directly rather than transferring the cost to merchants or customers.
