Kerala hotels and restaurants to stop accepting UPI payments above ₹2,000 from October 15 | Today’s news
The Kerala Hotels and Restaurants Association (KHRA) on Tuesday, October 13 announced that its members will stop accepting the above payments through Unified Payments Interface (UPI). ₹2,000 on October 15, protesting the proposed Merchant Discount Rate (MDR) on digital transactions.
KHRA said the proposed framework of 0.4% MDR would increase the financial burden on small businesses, especially hotels, restaurants and lodges. Customers making payments in excess of ₹2,000 would have to use cash at participating establishments, said KHRA president G. Jayapal, according to Hindus.
“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 are now being charged extra. This will put another 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,” Jayapal said.
The restaurant association is concerned about the additional costs
KHRA President Jayapal and Secretary General N. Abdul Razak said in a joint statement that UPI payments have become widely used across the hotel and restaurant industry.
Jayapal said the additional charges for digital payments would affect businesses, especially smaller establishments operating on tight margins. The association’s proposed move aims to oppose the introduction of merchant charges for UPI transactions.
“Either the extra charges should be abolished or the limit should be increased ₹10,000 from ₹2,000,” he said.
Meanwhile, members of business organizations in Ernakulam organized a torch march across the city demanding the withdrawal of the proposed UPI MDR charges.
NPCI postpones implementation of UPI merchant charges
In a relief to UPI users and merchants, the National Payments Corporation of India (NPCI) on Tuesday announced that the implementation of the proposed 0.4% MDR on transactions exceeding ₹2,000 was deferred.
NPCI said the revised implementation date will be decided later Diwali. The delay delays the proposed framework, which has raised concerns among merchants about the cost of accepting digital payments.
“The UPI and Services Steering Committee has today decided that in view of the festive period, Merchant Discount Rate (MDR) on selected Person-to-Merchant (P2M) UPI transactions will be implemented immediately after Diwali on a date to be announced separately,” NPCI said in a statement on Tuesday.
MDR is to be paid by merchants, not customers
Under the proposed framework, the business discount rate would be paid by merchants rather than consumers. The charges are to apply to eligible transactions, with the proposed MDR limited to ₹300 for transactions amounting to ₹75,000 or more.
The proposed fees have drawn opposition from a section of the business community, which says the additional payment costs could affect businesses and discourage the use of digital payment methods.
