Nagpur: The Chamber of Associations of Maharashtra Industry & Trade (CAMIT) has urged Hon’ble Union Finance Minister Smt. Nirmala Sitharaman Ji to review the introduction of 0.4% Merchant Discount Rate (MDR) on specified Person-to-Merchant UPI transactions above ₹2,000, scheduled to come into effect from 15 October 2026.
CAMIT welcomed the Government’s decision to keep person-to-person transactions and merchant payments up to ₹2,000 free, but expressed concern that imposing a recurring transaction cost on merchants could adversely affect the very ecosystem that has made India a global leader in digital payments.
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Dr. Dipen Agrawal, President, CAMIT, said:
“UPI is one of India’s greatest digital success stories, and the trading community—from the smallest retailer to large businesses—has been an indispensable partner in making this revolution possible.
The scale itself tells the story. In July 2026 alone, UPI processed nearly 2,366 crore transactions involving an extraordinary value of approximately ₹29.88 lakh crore. This demonstrates how deeply digital payments have become embedded in India’s economy.
More importantly, digital payments have helped bring transactions into a transparent and traceable financial ecosystem and have complemented the Government’s efforts towards formalisation and better tax compliance. Even the smallest merchants today increasingly accept digital payments.
India’s gross GST collections have consequently reached unprecedented levels, with collections touching nearly ₹2.43 lakh crore in April 2026, while total GST collections during FY 2025–26 were approximately ₹22.27 lakh crore. While this growth cannot be attributed to UPI alone, increasing digitisation, GSTN, e-invoicing and greater formalisation have collectively contributed towards improved transparency and tax compliance.
Against this background, imposing a further 0.4% MDR on merchant UPI transactions above ₹2,000 deserves reconsideration.
₹2,000 today cannot reasonably be regarded as a high-value commercial transaction. Routine purchases of garments, medicines, electrical goods, spare parts, consumer durables and numerous other goods regularly exceed this amount.
A trader accepting a digital payment is already contributing towards a transparent and formal economy. We should incentivise that behaviour, not attach an additional recurring cost to it.
The Government legitimately requires resources to maintain cybersecurity, infrastructure and resilience of the UPI ecosystem. However, CAMIT respectfully submits that this cost should not be transferred to traders and MSMEs through MDR.
We therefore urge Hon’ble Finance Minister Smt. Nirmala Sitharaman Ji to kindly review the decision and consider continuation of the Zero-MDR regime for UPI merchant transactions, particularly for traders and MSMEs, or devise an alternative mechanism for adequately compensating banks and payment service providers.
Digital payments should remain an incentive for formalisation—not become a cost of formalisation.
India has successfully persuaded crores of businesses to move from cash to digital payments. Policy must ensure that we continue moving forward on that journey and do not unintentionally create an economic incentive to move back towards cash.”
Dr. Dipen Agrawal
President, CAMIT
Chamber of Associations of Maharashtra Industry & Trade
