UPI MDR Charges: Noida Businesses Divided But Say Will 'Absorb Costs Politely'

Traders and business owners in Noida remain divided over the UPI merchant discount rate (MDR) charges that come into force next month. News18 spoke to shopkeepers in Sector 31’s Nithari Market and electronic goods store owners with high footfall in Sector 18 to understand how they plan to navigate the new UPI MDR charges.

Electronic goods store owner Harish Gupta said the prospect of passing the MDR cost on to customers is “unfair”, since it is a cost that business owners are expected to absorb.

From October 15, a 0.4 per cent MDR will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as

well as the vast majority of everyday merchant payments, will remain free.

While some traders, including retail fuel outlets, have said they may not accept UPI transactions above Rs 2,000 because of the impact on their wafer-thin margins, electronic goods seller Harpreet Kohli said business owners like him have to “absorb the costs politely”.

Kohli and Gupta, both of whom sell electronic goods, also highlighted that they have been paying MDR charges on other payment modes.

“We will not pass it on to the customer. We will absorb it politely. Anyway, we had to incur a whole array of MDR charges but it is not fair to pass it on to the customer, since it is a merchant discount rate. It is something that we will bear,” said Kohli, who runs Kay Dee Electronics, while speaking to News18.

Gupta, who runs Ankur Electricals in Sector 18, said store owners like him have always paid MDR on different payment options.

“We have four modes of payment: credit card, debit card, Razorpay link and RTGS/NEFT. In each of these, we were already paying around 0.85% to 1.2% in MDR costs,” Gupta said, highlighting that UPI was a “gamechanger”.

“UPI was the game changer for us. Now, if UPI also comes under MDR, it will affect our profit margins. But we also have to contend with online giants competing with us, so we cannot pass the cost on to the customer. At most, we can ask customers to pay in cash. Otherwise, if they want to pay by UPI or any other mode, we will have to honour that,” he added.

‘Can Only Request Cash But No One Carries Wallets’

At Nithari Fish Market in Sector 31, customers bargained over fish prices as successful UPI transactions pinged on phones. Fish seller Gautam Haldar said the MDR charges were manageable, but having to bear the cost could eventually hurt profit margins.

“How much fish do we even sell and even on top of this if merchants are charged, what profit will remain,” he said.

“Will remove some of these QR codes,” Haldar said, pointing to the several ‘Bengali Fish Shop’ QR codes behind him on the wall as his shop assistant peeled prawns for a waiting customer.

Another fish seller, Niranjan Haldar, said customers cannot be charged for MDR, while peeling a large rohu. Gautam Haldar agreed, saying that at best, customers could be requested to pay in cash, but most people do not carry cash anyway.

“Not many people carry cash,” he said.

Kirana store owner Ajit Sarkar said the charges were not a major concern because not every sale crosses Rs 2,000. However, he said the costs could add up cumulatively and affect profit margins.