Kerala’s gold and silver merchants have opposed the proposed 0.4% merchant discount rate on person-to-merchant UPI transactions above Rs 2,000, demanding that the additional charge be withdrawn instead of postponed until after Diwali.
The Kerala Gold and Silver Merchants Association organised demonstrations on Tuesday outside central government offices across the state. Around 4,000 bullion and jewellery merchants took part in the protests, according to the association, which said delaying the charge would not resolve the concerns of traders and consumers.
“Postponing the charges is not a solution. Imposing fees on digital transactions contradicts govt’s push for a cashless economy and imposes a financial burden on both traders and consumers,” KGSMA general secretary S Abdul Nasar said.
The proposed UPI MDR is the central issue in the dispute. The National Payments Corporation of India announced earlier in the day that the 0.4% charge on eligible person-to-merchant UPI payments above Rs 2,000 would be implemented after Diwali. The framework was originally scheduled to take effect from October 15.
KGSMA said digital payments had become essential for daily trade and argued that additional processing fees could place pressure on small and medium enterprises operating on thin margins. The association also said consumers who depend on digital payments would face an additional financial burden if the proposed charge is introduced.
The issue is particularly significant for high-value retail transactions, including bullion and jewellery purchases, where payments frequently exceed the proposed threshold. The association’s objection places the question of payment costs within the wider operating environment of small businesses, which increasingly depend on digital transaction systems for routine commerce.
KGSMA rejected official assurances that the charges would be delayed until after the festival season, saying that a postponement would not address the underlying problem. It demanded the permanent withdrawal of the proposed UPI MDR and reaffirmed that it would continue its agitation until that demand was met.
The immediate implementation timeline now depends on the post-Diwali schedule announced by NPCI. The association’s demonstrations and continued opposition are expected to keep the proposed charge under focus as the revised timeline approaches.
