Hyderabad, Sept. 24: TPCC spokesperson Syed Nizamuddin has demanded the withdrawal of the new UPI Merchant Discount Rate, warning that the cost could affect Hyderabad’s trade network.
Nizamuddin said the MDR could indirectly affect wholesalers, retailers and consumers if merchants absorb the additional payment cost.
The Centre has said the MDR will apply only to specified merchant transactions above Rs 2,000.
Under the new framework, a 0.4% MDR will apply to eligible person to merchant UPI transactions above Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above.
TPCC Raises Concern Over UPI MDR Impact on Traders
Addressing a press conference at Gandhi Bhavan, Nizamuddin said the economic impact should not be assessed only by whether customers directly pay the MDR.
He argued that merchants could respond by absorbing the cost, reducing discounts or adjusting prices.
The Centre, however, has said merchants should not pass the MDR on to customers. It has also described MDR as a payment ecosystem charge rather than a government tax.
Nizamuddin said the issue was important for Hyderabad because digital payments are widely used across local markets.
He cited July figures showing UPI transactions worth about Rs 24,939 crore in Hyderabad district, Rs 35,119 crore in Rangareddy and Rs 31,748 crore in Medchal Malkajgiri.
He said these figures cover all UPI transactions and are not limited to merchant payments.
Nizamuddin also questioned the Centre’s statement that about 96% of merchant transactions would remain unaffected.
According to the government, MDR will apply to only about 4% of merchant transactions. Payments up to Rs 2,000 and eligible transactions by small merchants receiving up to Rs 1 lakh a month through UPI QR codes will remain under the zero MDR framework.
Nizamuddin said the impact could extend through the wholesale retail chain.
He cited markets such as Begum Bazaar and said traders handling larger invoices could face additional costs on eligible transactions.
Under the notified framework, a Rs 20,000 eligible transaction would attract Rs 80 in MDR, while a Rs 50,000 transaction would attract Rs 200.
He also raised concerns about businesses in Laad Bazaar, Pathergatti and Hyderabad’s textile, handicraft, hotel and tourism sectors.
Nizamuddin questioned the Rs 1 lakh monthly threshold for the small merchant exemption. He said business turnover should not be confused with profit.
The TPCC spokesperson acknowledged that maintaining payment infrastructure and cybersecurity involves costs. However, he questioned how those costs should be distributed across the payment ecosystem.
The Centre has said the new framework is intended to support the long term sustainability and expansion of UPI while protecting individuals and small merchants.
Nizamuddin demanded that the government withdraw the MDR framework and disclose the value of transactions that would fall under the charge.
He also asked the Centre to publish the share of merchant payment value represented by the transactions covered by MDR.
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