Nagpur traders say UPI charge will push them back to cash payments
Nagpur traders say a new merchant discount rate on large UPI payments will make digital payments costlier and push them toward cash.
A decision to impose a merchant discount rate (MDR) on large merchant payments made through UPI has sparked growing anger among trade organisations. Several traders in Nagpur say the extra cost will make UPI payments expensive for them, and this could directly affect how customers choose to pay.
Some trade organisations are now preparing to encourage customers to pay in cash for large transactions. Under the rule, transactions of 75,000 rupees or more will attract this charge, capped at a maximum of 300 rupees per transaction.
Traders said they had supported the government's push for digital payments, but if they are made to pay an additional charge, they will instead promote cash payments. Oil trader Anil Agrawal said, "We are already paying transaction charges and 18 percent GST. Now if the government also collects UPI MDR from us, we will promote cash payments. If a charge is also imposed on UPI transactions, we will not support it and will start promoting cash payments."
Utensil trader Mahavir Laturia said shopkeepers and traders in Nagpur district should now move towards cash payments. He said that after this decision on the additional charge, UPI payments will become an expensive option for traders working on thin margins. He said UPI was originally meant to make digital payments easy for both traders and customers, but if traders have to pay an extra charge on transactions above 2,000 rupees, many of them will now prefer cash payments.
Electric market trader Jawahar Patel said, "We have no problem with digital payments, but the extra cost should not be put on traders." He said traders are already opposing MDR on credit card transactions, and now they will also have to face a charge on UPI payments. Patel said traders will now also consider paying wholesalers and other businesses through cheques and banking channels for large payments.
Trader Virag Sanghvi said the charge will add to the trouble. He said the cost will rise for small, medium and wholesale businesses that receive UPI payments of more than 2,000 rupees. Even a small charge, added up over a month or a year, can become a large expense, and this new charge will create difficulties for small shopkeepers.
The finance ministry said on September 15, 2026 that UPI person-to-person transactions and 96 percent of merchant transactions will remain free, and that the new UPI charge structure will have no effect on any person-to-person transaction.
