Noida Traders Split Over UPI MDR as Merchants Prepare to Absorb Costs.
Businesses in Noida are divided over the upcoming merchant discount rate (MDR) on certain UPI transactions, with some traders worried about shrinking margins while others say they will continue accepting digital payments and absorb the additional expense.
To understand how businesses are preparing for the change, shopkeepers at Nithari Market in Sector 31 and electronic goods retailers in the busy Sector 18 area shared their views on the new charges.
From October 15, merchants will have to pay an MDR of 0.4% on person-to-merchant UPI transactions above Rs 2,000. The charge will be imposed on businesses rather than customers and will be capped at Rs 300 for transactions of Rs 75,000 or more. Person-to-person transfers and most routine merchant payments will continue to remain free.
‘WE WILL ABSORB THE COST’
Electronic goods retailers said passing the additional charge directly to customers would not be appropriate.
Harpreet Kohli, who runs Kay Dee Electronics, said merchants would have to absorb the cost, just as they already do with several other payment methods.
“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,” Kohli told News18.
Harish Gupta, owner of Ankur Electricals in Sector 18, said his business already pays MDR on credit cards, debit cards and other digital 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.
He described UPI as a major change for retailers because of its convenience and widespread use.
“UPI was the game changer for us. Now, if UPI also comes under MDR, it will affect our profit margins,” Gupta said.
However, he added that competition from online retailers makes it difficult for physical stores to add another charge to customers’ bills.
“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 said.
SOME TRADERS MAY LIMIT UPI
Not all businesses are equally comfortable with the new cost.
Some traders, particularly businesses operating on narrow margins such as fuel retailers, have indicated that they could reconsider accepting UPI payments above Rs 2,000.
For smaller merchants, even a seemingly modest percentage can become significant when it is deducted from already limited profits.
At Nithari Fish Market in Sector 31, however, the concern was less about the percentage itself and more about the cumulative effect on daily earnings.
Fish seller Gautam Haldar said businesses selling relatively low-margin products may find it difficult to absorb another expense.
“How much fish do we even sell and even on top of this if merchants are charged, what profit will remain,” he said.
Haldar also suggested that some QR codes could be removed from his shop.
“Will remove some of these QR codes,” he said, pointing towards multiple QR codes displayed on the wall of his shop.
Another fish seller, Niranjan Haldar, said the cost could not simply be transferred to customers.
Gautam Haldar agreed, saying that asking customers to pay in cash could be an option, but there was a practical problem.
“Not many people carry cash,” he said.
SMALL SHOPS WATCHING THE IMPACT
For kirana stores, the threshold of Rs 2,000 means many individual transactions may not attract the charge.
Kirana shop owner Ajit Sarkar said the new MDR was therefore not an immediate concern for every sale.
However, he pointed out that even small deductions can accumulate over time and eventually affect a merchant’s overall margins.
The response from Noida’s business community therefore remains mixed. While some merchants are considering limiting high-value UPI transactions, others say they will continue accepting digital payments rather than risk inconveniencing customers.
For retailers already paying MDR on other forms of digital payments, the new UPI charge is another business expense to factor into their margins. For smaller traders, the cumulative impact over hundreds of transactions could determine how they adapt once the new system takes effect.
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