Ahmedabad traders have urged the Union government to permanently withdraw the proposed Merchant Discount Rate (MDR) on UPI transactions above ₹2,000, after welcoming the reported decision to defer implementation of the 0.4% charge until after Diwali.
According to a report by Sandesh – Ahmedabad, an Ahmedabad traders’ association has written to Finance Minister Nirmala Sitharaman seeking a permanent waiver rather than a temporary postponement. The traders said keeping UPI transactions free of charges was necessary to support digital payments and protect merchants from additional costs.
The proposed rule would impose an MDR of 0.4% on specified UPI transactions exceeding ₹2,000, the report said. Traders have expressed concern that the charge could increase the cost of accepting digital payments, particularly for small and medium-sized businesses operating with limited profit margins.
The timing of the deferment is significant for Ahmedabad’s retail markets, where the festive season brings a sharp increase in purchases and digital transactions. The traders’ response indicates that the immediate relief has reduced concern for the current shopping period, but has not resolved the longer-term question of who should bear the cost of large-value UPI payments.
The association’s representation to the Finance Minister argues that UPI should remain completely free for both merchants and customers. The traders said a permanent waiver would encourage continued use of digital payments and prevent businesses from facing an additional deduction on each qualifying transaction.
The issue places merchant payment costs at the centre of the wider expansion of digital commerce in urban markets. For retailers, payment charges are directly linked to transaction volumes and margins. For customers, any additional cost absorbed by businesses could affect pricing or influence how merchants accept payments. The supplied report, however, does not specify whether the proposed MDR would be passed on to customers, absorbed by merchants or supported through another mechanism.
The report also does not provide details of the government notification or the precise categories of UPI transactions covered by the proposed charge. It attributes the demand for a permanent cancellation to Ahmedabad’s trader community and records the association’s letter to the Finance Minister, but does not include a response from the Finance Ministry.
For now, the reported deferment offers temporary relief through the Diwali period. The next decisive step will be the Union government’s response to the traders’ representation and whether the proposed 0.4% MDR is withdrawn permanently or considered again after the festive season.
