Dharwad traders urge government to scrap UPI transaction charges

The Dharwad Chamber of Commerce and Industries has formally requested the government to abandon proposals to levy Merchant Discount Rate (MDR) charges on designated UPI transactions, citing concerns about the financial impact on the retail and trading community.

Chamber representatives contend that introducing MDR fees would add to operational costs for merchants across small and large businesses, potentially eroding already thin profit margins in a highly competitive retail environment. They argue that traders would have limited choice but to offset these additional expenses by raising prices on goods and services.

The business body's intervention reflects broader apprehension within Karnataka's commercial sector about government policies affecting digital payment adoption and merchant viability. Small traders and retailers, who have increasingly embraced UPI for day-to-day transactions, fear that cost burdens could discourage further uptake of the digital payment system.

The chamber's appeal comes as policymakers continue deliberating the appropriate regulatory framework for digital payments in India. The proposed MDR implementation on certain UPI categories remains under review, with industry stakeholders emphasizing the need for measures that balance government revenue considerations with the interests of merchants and consumers.