Just a day after the Centre imposed a fee on UPI payments, the decision has come under scrutiny. A member of the National Traders Welfare Board has urged the Centre to immediately withdraw the 0.4 percent merchant discount rate on UPI transactions above Rs 2,000, saying the move could hurt consumers and businesses.
Ramesh Khandelwal, who represents Madhya Pradesh on the government constituted sector NTWB, said the levy could adversely affect business growth and eventually lead to a hike in prices.
“The decision to impose MDR on UPI transactions is against the government’s policies on ease of doing business. This will impact business growth and may lead to higher prices,” Khandelwal said.
Mentioning that he would raise the issue of levying MDR on UPI transactions at the upcoming meeting, he claimed that the withdrawal request was in the larger interest of consumers and businesses.
The NTWB has been set up by the Department for Promotion of Industrial and Internal Trade to advise the central government on various welfare measures for traders and their employees.
The Centre’s decision to impose a levy on UPI payments ends a period of six years of free UPI payments. From October 15, a levy of 0.4 percent will be imposed on merchant transactions above Rs 2,000 made through UPI, while person-to-person transfers and smaller merchant payments will remain free.
Under the new framework, the merchants will bear the charges and not the consumers. It will be capped at Rs 300 per transaction of Rs 75,000 or more.