Ranchi, September 17, 2026: Federation of Jharkhand Chamber of Commerce and Industries President Tulsi Patel has demanded the withdrawal of the proposed 0.4% Merchant Discount Rate (MDR) on select UPI merchant transactions above ₹2,000.
Tulsi Patel has written to Union Finance and Corporate Affairs Minister Nirmala Sitharaman, highlighting concerns of the business and industry community over the proposed charge.
She said that the zero-MDR system for merchants has played an important role in the widespread adoption and acceptance of UPI payments across the country. Small shopkeepers, traders, MSMEs, retailers and service-sector establishments have increasingly adopted digital payments under this system.
According to Patel, imposing a 0.4% MDR on select merchant-to-customer UPI transactions above ₹2,000 could increase the operating costs of businesses. While the amount involved in an individual transaction may appear small, its cumulative impact could be significant for businesses handling a large volume of digital transactions.
Tulsi Patel said that retailers, wholesalers, distributors and several businesses in the service sector operate on competitive and limited margins. With rising expenses related to employees, transportation, electricity, rent, compliance and other operational requirements, an additional recurring cost for accepting digital payments could create an added financial burden on businesses.
She said that the UPI payment system, which has been available without MDR for several years, has helped strengthen the shift from cash to digital payments in the country. Increasing the cost of accepting digital payments at the merchant level could affect payment behaviour among businesses in some sectors.
Patel said the Chamber understands the need for the long-term sustainability of the UPI ecosystem, payment security and investment in related services. However, she stressed that these objectives should be achieved through a mechanism that does not discourage merchants from accepting digital payments.
Tulsi Patel urged the Central Government to withdraw the proposed MDR on select UPI merchant transactions above ₹2,000 and continue the existing zero-MDR system for merchants. She also called for a detailed assessment of the potential impact of the proposed MDR on MSMEs, retailers and businesses handling a high volume of digital transactions, in consultation with industry organisations.
She further informed that the Jharkhand Chamber has also sent a letter to the Governor of the Reserve Bank of India (RBI) regarding the issue.
A meeting of Chamber office-bearers was also held at the Chamber Bhawan on the issue. Those present included Chamber President Tulsi Patel, Vice Presidents Vikas Vijayvargiya and Rohit Poddar, General Secretary Rohit Agrawal, Joint Secretary Amit Sharma and member Alok Kumar.
