India

KHRA to Stop Accepting UPI Payments Over ₹2,000 Amid Proposed MDR

By Livemint Automation

The Kerala Hotel and Restaurant Association (KHRA) announced on Tuesday, October 13, that its members will no longer accept Unified Payments Interface (UPI) payments above ₹2,000 starting October 15. The move is a protest against a proposed 0.4% merchant discount rate (MDR) on digital transactions, which KHRA says would increase the financial burden on small businesses such as hotels, restaurants and lodges.

KHRA president G. Jayapal told The Hindu that the industry is already struggling with rising raw‑material costs and that the new charges would add to the financial strain. He said the industry was encouraged to shift to digital payments, only to be faced with extra fees. Jayapal and general secretary N. Abdul Razak noted that UPI payments are widely used in the sector and that the additional charges would hit smaller establishments with limited margins.

The association suggested that either the extra charges be removed or the limit be raised to ₹10,000. Trade organisations in Ernakulam organised a torch march demanding the withdrawal of the proposed UPI MDR.

In response, the National Payments Corporation of India (NPCI) announced that the implementation of the 0.4% MDR on transactions exceeding ₹2,000 would be deferred until after Diwali. NPCI said a revised implementation date would be decided later and that the MDR would be payable by merchants, not consumers. The proposed framework would cap the MDR at ₹300 for transactions of ₹75,000 or more. The delay was welcomed by traders who feared the new costs could discourage digital payment use.