MDR on UPI: Keralam Hotels Association says it will stop accepting UPI payments above ₹2,000 from October 15

Customers will have to pay in cash for transactions above ₹2,000, says Kerala Hotel and Restaurant Association president (proxy image) | Photo credit: The Hindu

The Kerala Hotels and Restaurants Association (KHRA) on Tuesday (Oct 13, 2026) announced that its members will stop accepting UPI payments above ₹2,000 from October 15, following the introduction of a 0.4% UPI Merchant Discount Rate (MDR) framework, which it said will impose additional financial burden on small establishments. Customers will have to pay in cash for transactions above ₹2,000, KHRA president G. Jayapal said.

“The industry is already suffering from rising prices of raw materials. We feel cheated, especially when we were all encouraged to switch to digital payments and now they are being charged extra. This will put an additional financial burden on us. The industry is already going through a tough time due to rising prices and this will plunge us further into the financial crisis,” said Mr. Jayapal.

In a joint statement, KHRA President Mr. Jayapal and Secretary General N. Abdul Razak noted that UPI is widely used in the hotel and restaurant industry. Additional charges for digital payments would affect the industry, especially hotels and lodges, Mr. Jayapal said.

“Either the additional charges should be abolished or the limit should be raised to ₹10,000 from ₹2,000,” he said.

Published – 13 Oct 2026 12:18 IST