RANCHI, Sept 17: The Federation of Jharkhand Chamber of Commerce and Industries (FJCCI) has urged the Centre to withdraw the proposed Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) merchant transactions exceeding Rs 2,000.
FJCCI president Tulsi Patel wrote to Union Finance and Corporate Affairs Minister Nirmala Sitharaman, highlighting concerns raised by the business and industrial community over the proposed charges.
The chamber said the zero-MDR system had played an important role in the widespread adoption of UPI across the country, particularly among small shopkeepers, traders, micro, small and medium enterprises, retailers and service-sector establishments.
According to the chamber, imposing an MDR of 0.4% on select merchant-to-customer transactions above Rs 2,000, subject to the prescribed per-transaction cap, could increase operating costs for businesses.
Patel said that while the charge on an individual transaction may appear modest, its cumulative impact could be significant for businesses handling large volumes of digital payments.
The chamber noted that retailers, wholesalers, distributors and service-sector businesses often operate on competitive and relatively narrow margins. It said rising expenditure on employees, transportation, electricity, rent, regulatory compliance and other operational requirements was already putting pressure on businesses.
The FJCCI said an additional recurring cost for accepting digital payments could therefore create an economic burden, particularly for establishments with high transaction volumes.
In its communication to the Finance Ministry, the chamber acknowledged the need to ensure the long-term sustainability of the UPI ecosystem and to support investment in payment security and related infrastructure.
However, it said measures to achieve these objectives should not discourage merchants from accepting digital payments.
The chamber urged the Finance Minister to retain the existing zero-MDR framework for merchants and conduct a detailed assessment of the potential impact of the proposed MDR on MSMEs, retailers and businesses handling large volumes of digital transactions in consultation with industry associations.
The FJCCI has also sent a representation on the issue to the Governor of the Reserve Bank of India.
A meeting of chamber office-bearers was held at the chamber premises on Wednesday to discuss the matter. FJCCI president Tulsi Patel, vice-presidents Vikas Vijayvargiya and Rohit Poddar, general secretary Rohit Agrawal, joint secretary Amit Sharma and member Alok Kumar attended the meeting.
The chamber said it would continue to communicate the concerns of the business community to the relevant authorities.
