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<\/div>\n<\/div>\n<\/div>\nNEW DELHI: Govt on Wednesday said there would be no rethink on the 0.4% merchant discount rate (MDR) on person-to-merchant UPI transactions, amid demands to withdraw the fee from small retailers, petroleum dealers and brokers, who argued that their margins would be affected.A senior govt official said MDR was introduced in the larger interest of the UPI ecosystem and to strengthen its safety and security. “There is no rethink on this,” the official said, adding that the decision was taken when the UPI system was introduced in 2020 and that the new framework will make it self-sustainable.Communications minister Jyotiraditya Scindia clarified that the charge will not be imposed on customers. “Under the rules that have been introduced, no merchant can pass this charge on to any customer. If they do so, it will be outside the legal framework.” The assertion came amid criticism from traders, shopkeepers and political parties, with govt insisting that only 4% of the transactions will be impacted and person-to-person transfers will not face any charge.Petroleum dealers threatened to stop accepting digital payments of over Rs 2,000 if they were not exempted from the proposed framework that kicks in next month. “With wafer-thin margins, not revised in line with inflation since 2017, it is very difficult for petrol dealers to incur any such charges,” said Federation of All India Petroleum Association spokesperson Monty Sehgal.Smaller merchants may turn to cash, say retailers’ body<\/span>Digital payments account for 50-60% of petroleum dealers’ daily sales, of which 10-15% are UPI payments above Rs 2,000.United Petroleum Dealers Association said fuel retailers had promoted digital payments and supported the transition. “Penalising them for accepting the very infrastructure that has been encou-raged is inequitable,” it said.Govt’s move is also facing resistance from retail and apparel businesses, which fear it will squeeze margins in the festive season. Industry associations said the impact would be larger on smaller merchants operating on thin margins. “For MSME retailers… that burden creates a straightforward incentive to steer transactions back toward cash,” Retailers Association of India said.Nithin Kamath, founder and CEO of Zerodha, said on X, “The problem with broking is there is no guarantee money transferred to a broker will actually result in a transaction. As brokers, we can’t force a customer to trade after transferring money. And if we can’t pass the UPI charge on to the customer, there is essentially no limit to the cost a customer can impose on a broker without generating any revenue.”“The reality is 96% of transactions will bear no MDR. Customers will have 100% of payments free. Merchants will have 96% of payments free,” PhonePe CEO Sameer Nigam said.NITI Aayog vice-chairperson Ashok Kumar Lahiri said businesses must find ways to become self-sustaining rather than depend on govt subsidies.<\/div>\n \u2018Only 4% Of Transactions To Be Covered\u2019 NEW DELHI: Govt on Wednesday said there would be no rethink on the 0.4% merchant discount rate (MDR) on person-to-merchant UPI transactions, amid demands to withdraw the fee from small retailers, petroleum dealers and brokers, who argued that their margins would be affected.A senior govt official said MDR 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4% Of Transactions To Be Covered\u2019 NEW DELHI: Govt on Wednesday said there would be no rethink on the 0.4% merchant discount rate (MDR) on person-to-merchant UPI transactions, amid demands to withdraw the fee from small retailers, petroleum dealers and brokers, who argued that their margins would be affected.A senior govt official said MDR […]","magazineBlocksPostCategories":["\u0b26\u0b47\u0b36 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