Nagpur: Introduction of a 0.4% transaction fee on person-to-merchant UPI payments above Rs2,000 has sparked concern among Nagpur’s trade bodies that feel the additional cost may eventually be passed on to consumers and could revive cash transactions.From neighbourhood medical stores and garment shops to electronics outlets and automobile spare parts dealers, UPI is no longer merely a payment option — it has become the default mode of doing business. Considering this, trade representatives argued that Rs2,000 could hardly be considered a high-value purchase in the present market.Confederation of All India Traders national president BC Bhartia said businesses, particularly those operating on thin margins, would find it difficult to absorb the levy. “If an additional charge of 0.4% is imposed on merchant payments, traders cannot be expected to bear it from their margins. It will eventually be recovered through higher prices or passed on to customers directly or indirectly,” he said.Nagpur Chamber of Commerce Ltd president Kailash Jogani termed the move premature and demanded that UPI remain free until RBI’s Digital Rupee, or central bank digital currency (CBDC), becomes widely available and accepted. “If traders have to pay on transactions exceeding ₹2,000, many may recover that amount from buyers. It could also add to inflationary pressure,” Jogani said.In a representation to Prime Minister Narendra Modi, the chamber sought an accelerated nationwide rollout of Digital Rupee, a public awareness campaign and a merchant-friendly transition under which UPI and CBDC operate simultaneously.Chamber of Maharashtra Trade and Industry president Dr Dipen Agrawal also sought reconsideration of the decision. “Today, Rs2,000 is not a large amount. Purchases of clothes, medicines, electronics, spare parts and consumer durables routinely cross this threshold,” he said.Agrawal said merchants accepting digital payments were already contributing to a transparent and formal economy. “Instead of incentivising them, imposing an additional cost would be counterproductive,” he said.Nag Vidarbha Chamber of Commerce president Farooq Akbani said placing fresh costs or restrictions on UPI could undermine govt’s push towards digital payments.Trade representatives also questioned how effectively this could be enforced. They warned that merchants unable to absorb the additional cost may increase prices or discourage UPI payments for larger purchases, potentially slowing the shift away from cash.
