- New 0.4% UPI fee targets large merchant transactions.
- Traders protest fee, citing burden on low-margin businesses.
- CTI fears large UPI payments decline, urges reconsideration.
THThe organisation has also asked traders to accept cash payments on the day.
The protest comes ahead of the new UPI MDR framework that takes effect on October 15. Under the framework, a 0.4% MDR will apply to specified person-to-merchant UPI transactions above ₹2,000, with the fee capped at ₹300 for transactions of ₹75,000 and above. Customers will not be charged the MDR directly.
Why Are Traders Opposing UPI MDR?
CTI has urged Union Finance Minister Nirmala Sitharaman to withdraw the decision, arguing that the additional cost could particularly affect retailers and distributors operating on low margins.
CTI general secretaries Gurmeet Arora and Ramesh Ahuja said the organisation was not opposed to Digital India or digital payments. However, they argued that adding a cost to UPI transactions could increase the financial pressure on businesses that operate with limited margins.
CTI vice-president Rahul Adlakha and secretary Kunj Nakra said the move could place an additional financial burden on around 6 crore shopkeepers, traders and entrepreneurs. The trade body has said there is disappointment among traders over the proposed charges.
₹3,000 Payment Means ₹12 MDR, ₹50,000 Means ₹200
At the proposed 0.4% rate, an eligible ₹3,000 merchant UPI payment would result in an MDR of ₹12, while a ₹50,000 payment would attract ₹200. The charge will be capped at ₹300 for transactions of ₹75,000 and above.
CTI has argued that the impact could be greater for businesses where profit margins are already low. The organisation has therefore called on the government to reconsider the framework and retain UPI as a free payment option for merchants.
However, the new framework does not apply to every UPI transaction. Person-to-person payments will remain free, while payments to merchants up to ₹2,000 will also remain free. The government has said around 96% of P2M transactions will remain unaffected, with eligible small merchants also covered by zero-MDR provisions.
UPI Recorded Record Transactions In FY2025-26
CTI has cited government data to highlight the scale of UPI’s role in India’s digital payments ecosystem. According to figures cited by the trade body, UPI recorded 24,162 crore transactions in financial year 2025-26, with the total value of transactions at around ₹314 lakh crore.
CTI said UPI accounted for around 84% of the country’s digital transactions during the period. Person-to-merchant payments accounted for around ₹198 lakh crore of the total value, according to the organisation. The government has separately reported broadly similar figures for UPI transactions and their overall value.
The trade body has argued that the proposed MDR needs to be viewed in the context of the enormous value flowing through UPI, particularly through merchant payments.
Transactions Above ₹2,000 Make Up 4% Of Volume, Says CTI
According to CTI, UPI transactions above ₹2,000 accounted for only around 4% of transactions by number, but represented approximately ₹131 lakh crore in value.
The organisation said this meant such higher-value transactions accounted for around 66% of the total value of UPI payments received by merchants. CTI has argued that the relatively small share by volume could therefore still translate into a significant cost for businesses because of the value involved.
The new MDR framework, however, is limited to specified merchant transactions, with several categories and eligible small merchants exempt from the standard 0.4% rate.
CTI Fears 50% Drop In Large UPI Payments
CTI chairman Brijesh Goyal has estimated that UPI payments above ₹2,000 could decline by up to 50% once the MDR takes effect on October 15.
The organisation has argued that if accepting larger UPI payments becomes more expensive for merchants, some traders could reconsider using UPI for high-value transactions. CTI has also raised the possibility of greater reliance on cash payments.
CTI has called on the government to reconsider the MDR framework, saying it should take into account the interests of small traders, everyday markets and the wider economy.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: abplive.com
