- Traders in Mumbai are concerned about a new MDR policy.
- Retail business associations, including MCCIA, plan a 'No UPI Day' to protest the Merchant Discount Rate (MDR) levy.
Kerala Textile Association Opposes UPI Merchant Discount Rate Charges
What happened
The Kerala Textile & Garments Association has strongly opposed proposed Merchant Discount Rate (MDR) charges on UPI transactions. The association argues that applying this fee across the supply chain from manufacturer to retailer will lead to higher end-consumer prices. They noted that a 0.4 per cent fee on gross turnover could consume 10 to 25 per cent of a merchant’s net profit, potentially pushing merchants back to cash transactions.
Why it matters
The association stated that UPI functions as essential public digital infrastructure that boosts tax collections for Central and State Governments and drives economic formalization. Banks also benefit from UPI transactions by expanding customer bases and lowering physical cash-handling overhead.
Retail business associations are planning a 'No UPI Day' to protest the MDR levy, and traders in Mumbai are concerned about a new MDR policy.
Who's involved
- ICICI BankA bank that benefits from UPI transactions by expanding CASA deposits and lowering overhead
- KeralaThe Indian state where the textile and garment industry is located
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- KeralaSpeculative
The opposition from the Kerala Textile & Garments Association might affect the regional textile and garment industry's sales or costs.
- ICICI BankSpeculative
Increased UPI usage might expand CASA deposits, benefiting ICICI Bank's revenue.