The Chamber of Trade and Industry has called for the reversal of a new merchant discount rate on higher-value UPI transactions, warning it could hinder digital payment adoption and revive cash usage amid protests and industry concerns.
The Chamber of Trade and Industry has urged Finance Minister Nirmala Sitharaman to roll back a new merchant discount rate on higher-value UPI payments, arguing that the change could raise costs for traders and push some shoppers back towards cash. The Delhi-based group has also called for a “No UPI Day” on Gandhi Jayanti, asking shopkeepers across India to cover QR codes, scanners and sound boxes with black cloth and accept only cash on 2 October as a symbol of protest.
According to the National Payments Corporation of India, the new framework takes effect on 15 October 2026 and applies a 0.4% MDR to person-to-merchant UPI transactions above ₹2,000. Person-to-person transfers remain free, and the charge falls on merchants rather than customers. Media reports have said the government will monitor implementation daily to ensure banks and payment aggregators do not pass the cost on to consumers.
CTI leaders Gurmeet Arora and Ramesh Ahuja said the levy would add pressure to retailers and distributors operating on thin margins. The group’s vice-presidents and secretaries said the policy had left millions of shopkeepers and entrepreneurs worried about higher overheads. Chairman Brijesh Goyal warned that a fee on larger UPI payments could slow adoption and, in the organisation’s view, revive cash-based transactions if merchants and customers start looking for ways to avoid the charge.
The group pointed to official figures cited by the business press to underline how central UPI has become to India’s payments system. It said UPI handled 24,162 crore transactions in the 2025-26 financial year, worth about ₹314 lakh crore, and accounted for roughly 84% of digital payments. CTI said merchant payments, or person-to-merchant transactions, made up ₹198 lakh crore of that total, while transactions above ₹2,000 accounted for only 4% of the number of payments but 66% of their value. Based on that reading, the association argues that even a relatively narrow fee could have an outsized effect on trade, especially in retail and small business. The NPCI and other reports have said the levy is designed to help fund long-term digital payments infrastructure and still leaves small-value purchases free.
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