CAIT backs nominal MDR on high-value UPI transactions if proposed, says await Bill details
New Delhi, August 5
The Confederation of All India Traders, a leading body representing traders across India, on Wednesday said it would support a nominal Merchant Discount Rate on higher-value Unified Payments Interface transactions if proposed by the government, while stressing that the details of the legislation should be examined before drawing any conclusions.
Speaking to ANI, CAIT Secretary General and BJP MP Praveen Khandelwal said the government would have logical reasons behind bringing any such proposal and expressed confidence that it would ultimately make digital payments more convenient.
"Let the Bill come. After the Bill comes, we will find out the solution. But if the government is bringing it, then definitely there will be some logical reasons behind it," Khandelwal said.
He said India has emerged as a global leader in digital payments through UPI and added that any proposal should be viewed only after its provisions are made public.
"The large number of digital transactions in UPI is a record in the whole world. Once the Bill comes... with my confidence, the Bill will definitely give a lot of convenience to those who pay by digital," he said.
Responding to reports that transactions above Rs 2,000 could attract charges, Khandelwal said it is normal for services to carry a fee, while emphasising that smaller transactions should remain protected.
"Whenever we avail any kind of service, then there is a charge on that service. The limit up to Rs 2,000 is usually for common people. It should not burden the common man. But if other facilities are being provided... if there is a nominal charge, then I feel that we should give it," he said.
Khandelwal also said traders would support such a move if it improves business operations.
"Businessmen are not behind giving money anywhere. As long as there is ease of doing business and ease of living," he said.
The remarks come after the introduction of the Taxation and Other Laws (Amendment) Bill, which proposes changes to the Payment and Settlement Systems Act.
The observations come amid policy discussions following the introduction of the Taxation and Other Laws (Amendment) Bill, 2026, which proposes changes to the Payment and Settlement Systems Act to remove UPI's automatic statutory exemption from MDR.
While the proposed legislation does not levy MDR, it would empower the government to notify which digital payment modes remain exempt from merchant charges.
— ANI
Reader Comments
As a small business owner, I rely on UPI for almost all my daily transactions. The zero MDR has been a blessing. If they start charging even 0.5% on payments above ₹2000, that's going to eat into my margins. I hope the government really thinks this through and doesn't burden small traders who are just trying to make an honest living. 😔
The way India has leapfrogged the world in digital payments is incredible. Even here in the US, we're jealous of how seamless UPI is. If a nominal fee helps sustain and improve the infrastructure, I think it's a reasonable trade-off for high-value transactions. But it needs to be transparent and regulated — not left to the banks to decide arbitrarily.
I'm a bit skeptical about this. The "let's see the Bill first" approach from CAIT sounds like they're already preparing to accept it. But let me ask — where will this money go? Will it improve UPI infrastructure, or just fill the pockets of banks and payment companies who are already making billions? Show us the plan first, then we'll talk. 🤔
Finally, some sense on this issue! Services aren't free — someone has to pay for the servers, the security, the R&D. If I'm moving ₹10,000 or more for business, I don't mind paying a tiny fee. What I do mind is the government sneaking in charges without proper debate. Good on CAIT for asking to see the Bill first. That's the democratic way. 👏
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.