Traders do not merely sell goods; they also purchase them. Consequently, they often make bulk payments that exceed ₹2,000. The government has not taken into account the charges applicable to such payments. A trader expressed this view after the government announced a 0.4 percent Merchant Discount Rate (MDR) on UPI transactions exceeding ₹2,000.
The announcement of charges on UPI transactions has caused concern among approximately 32 lakh small traders in the state. According to estimates, UPI payments account for about 72–76 percent of total payments at small shops in the state, with the remaining transactions conducted in cash. Of these UPI payments, which account for 72–76 percent of the total, approximately 50–60 percent involve transaction values of less than ₹2,000. However, the remaining 16–22 percent involve values exceeding ₹2,000. There is a concern that the imposition of taxes on these transactions could impact merchants’ profits. According to data from the National Payments Corporation of India (NPCI)—the body managing UPI—UPI transactions worth ₹40,133 crore were recorded in the state in July 2026. Over 30.86 crore UPI payment transactions took place during that month. Based on these figures, there is a risk that charges could be levied on monthly UPI transactions worth ₹1,605.32 crore, amounting to an annual transaction value of approximately ₹20,000 crore. A maximum annual fee of ₹80 crore could be collected from such payments at a rate of 0.4 percent.
Commenting on this, R.K. Shukla, Vice President of the Confederation of All India Traders (CAIT), stated, “We oppose this government policy. First, they made opening bank accounts mandatory. Then, they pushed for digital payments. Now, they have imposed charges on them. We fear that in the future, these charges will be extended to all types of UPI transactions. Small traders will be affected by this decision. Policies favoring large businesses have led to the closure of 18 to 22 lakh small shops over the past three years.” He stated that the federation would therefore pressure the government to withdraw this charge in order to safeguard the interests of small shopkeepers.
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Dr. Prabhas Mishra, an Assistant Professor at Azim Premji University, noted that merchants might be unwilling to accept payments exceeding ₹2,000 and would likely discourage such transactions. The government seems intent on generating revenue from everything. Similarly, Amarendra Das, an Associate Professor at NISER, stated that while UPI users would not be significantly affected by the charges, small merchants might be reluctant to accept payments exceeding ₹2,000 due to the apprehension of incurring fees; they might ask customers to split their bills to keep individual payments below the ₹2,000 threshold.
