Kerala’s hotel and restaurant operators say they will reject UPI payments above ₹2,000, even as NPCI postpones the proposed merchant charge beyond Diwali.
The Kerala Hotel and Restaurant Association has said its members will stop accepting UPI payments above ₹2,000 from October 15, escalating a dispute over a proposed merchant charge on digital transactions that has unsettled small businesses across the state. The association says the plan would add pressure to hotels, restaurants and lodges already coping with higher input costs and thin operating margins.
According to the association, the proposed 0.4% merchant discount rate would fall on merchants rather than customers, making everyday digital collections more expensive for operators that have spent years encouraging diners to pay electronically. G. Jayapal, the association’s president, said the industry felt it had been pushed towards digital payments only to face new charges for using them, and argued that businesses should either be exempted or allowed a much higher threshold before any fee applies.
The association has also suggested lifting the transaction limit to ₹10,000, instead of the current ₹2,000 threshold it says should trigger any additional charge. In Ernakulam, trade groups organised a torch march to press for the withdrawal of the planned fee, underlining the frustration among merchants who fear the move could hit customer spending and complicate billing in an industry that relies heavily on high-volume, low-margin sales.
The protest, however, may be short-lived. The National Payments Corporation of India said on Tuesday that implementation of the proposed MDR on selected person-to-merchant UPI payments would be delayed until after Diwali, with the exact date to be announced later. That postponement means the fee will not begin on October 15 as first expected, though the issue remains unresolved and merchants are still waiting for clarity on how the policy will ultimately be applied.
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