By: Sakshat.Tornekar“This will impact our margins as every transaction is above 2,000 in my shop,” said R Murtaza, a furniture merchant. He added, “If I sell furniture worth 10,000 a day, I’ll be indirectly paying 15,000 a year.”Health and fitness shop owner Thrishul Kumar said the move could put further pressure on physical stores. “With footfall already low due to the impact of online shopping on stores, shop owners will be forced to avoid UPI in the first place, which will give more way to cash transactions,” he said.Similar concerns were raised by the owner of a travel agency, who said the impact could be significant for businesses operating on thin margins. “In sectors like tourism, the profit margins are hardly 500 to 600,” said Parvinder Singh Khanuja, owner of Triptonic. “The merchant would not be able to accept large payments in cash, and if UPI transactions come at the cost of the profits, it would be a deadlock situation,” he added.
Some owners fear this may lead to increased cash transactions and reduced UPI usage.
Consumers, meanwhile, said they were not directly affected by the MDR but were sceptical about whether merchants would eventually try to pass on the cost to buyers. “Clarity is still awaited, but hopefully, the buyer shouldn’t be in a position to pay the extra amount. Usually, when a product cost rises, the customer is expected to pay the charges, and merchants will find a loophole to avoid the MDR,” said Jayadev, an IT employee.“The UPI ecosystem has several players, including banks, payment aggregators, payment service providers and NPCI, and all of them benefit from the growth of digital payments,” said economist E Ravathi. “There are also benefits in terms of greater transparency and tax compliance. So, if the overall benefits of UPI are higher than the costs involved in running the system, there is a case for keeping it free rather than passing the cost on through an MDR,” she added.Chartered accountant Prasad Rathi said he did not expect a significant impact on stock market transactions. “It’s only 0.02%, so on a 1-lakh margin top-up, you are looking at about 20. That is not a very significant amount, and brokers are likely to absorb it. SIPs through UPI AutoPay will continue to remain free, so retail investors don’t really have anything to worry about,” he said.
