Ahmedabad trader associations have asked the Union government to permanently withdraw the proposed UPI Merchant Discount Rate (MDR) charge after receiving temporary relief from a reported 0.4% fee on selected transactions above ₹2,000 during the Diwali season.
The demand follows the reported decision to defer implementation of the proposed charge until after Diwali. Ahmedabad’s merchant community has welcomed the deferment, saying it offers immediate relief during one of the busiest retail periods of the year, but has described the measure as temporary.
According to a report by Sandesh, an Ahmedabad traders’ association has written to Union Finance Minister Nirmala Sitharaman seeking a permanent waiver for UPI transactions. The association has argued that UPI should remain completely free for merchants and customers in order to support the continued expansion of digital payments.
The proposed 0.4% MDR would apply to certain UPI transactions above ₹2,000, the report said. MDR is a fee associated with processing digital payments and can affect the amount retained by a merchant from a transaction. The report did not provide further details on the proposed collection mechanism, the categories of transactions covered or the institutions that would bear the charge.
Ahmedabad traders have raised concerns that even a small percentage-based fee could affect the margins of small and medium-sized businesses. Retailers commonly operate with limited margins, and a charge applied across frequent digital transactions could add to their operating costs, the association has indicated.
The issue has gained importance as customers increasingly use digital payment methods in markets and shops. UPI has become a routine payment channel for both low-value purchases and larger retail transactions, making the terms governing merchant charges relevant to everyday commerce. For traders, the question is not only whether a charge is introduced, but also whether it would be absorbed by businesses or reflected in prices paid by consumers.
The post-Diwali deferment gives the government additional time before the reported proposal takes effect, but it has not resolved the underlying dispute. Ahmedabad’s traders are seeking a permanent policy decision rather than a seasonal postponement, arguing that a continuing waiver would provide greater certainty for businesses and preserve the incentive to accept digital payments.
The letter to the finance minister is the association’s formal request for the proposed MDR charge to be cancelled permanently. The next step will depend on the Union government’s response and on whether it issues further details about the proposed 0.4% charge after the Diwali deferment period.
