Business · Companies · 10 hrs ago
ISB survey finds many vendors may reduce UPI use if fees are introduced
An ISB survey found more than half of vendors surveyed may reduce UPI acceptance if a proposed fee is introduced.
The survey covered 722 street vendors across 14 Indian states and Union Territories.
The proposed 0.4% fee would apply to select UPI payments above ₹2,000, including some payments vendors make to suppliers for stock.
Around 70% of those surveyed said they make supplier payments above that amount, while 67% said they accept UPI.
Some vendors could turn to cash to avoid the charge, and researchers said large supplier payments could take a significant share of vendors’ daily net margins.
A separate survey finding said 10.4% of vendors had recently been asked by suppliers to pay extra for using UPI, although the MDR had not yet been levied.
The MDR rollout has been deferred until after Diwali, and no new implementation date has been announced.
More than half of street vendors surveyed by the Indian School of Business said they would reduce UPI acceptance if a proposed fee is introduced on some transactions.
The proposed 0.4% merchant discount rate would apply to select UPI transactions above ₹2,000.
The survey found that 70% of vendors made supplier payments above ₹2,000, which could make those transactions more exposed to the charge.
About one in 10 vendors said suppliers had already asked for extra charges on UPI payments.
Researchers said vendors could shift to cash or pass costs on to customers, although the Business Standard report notes that MDR cannot be passed on to customers.
- Who
- Street vendors surveyed by the Indian School of Business.
- What
- More than half said they might reduce UPI acceptance if a proposed 0.4% MDR is introduced on select transactions above ₹2,000.
- When
- The survey was conducted from September 24 to October 10, 2026. The MDR levy was deferred until after Diwali.
- Where
- Across 14 Indian states and Union Territories, covering 64 urban local bodies, cities and towns.
- Why
- Vendors may face additional costs on large supplier payments, and some said they might switch to cash to avoid the charge.
This story does not have two clearly opposing sides.
ISB conducted a telephonic survey of 722 randomly selected street vendors.
The MDR levy was originally scheduled to take effect.
The National Payments Corporation of India deferred the levy on select UPI transactions, with no new implementation date stated.
Economic Times and Business Standard published reports on the survey findings.
- Survey sample
- 722 vendors across 14 states and Union Territories
- Survey coverage
- 64 urban local bodies, cities and towns
- Vendors accepting UPI
- 67%
- Proposed MDR
- 0.4% on select UPI transactions above ₹2,000; capped at ₹300
- Suppliers charging extra
- 10.4% said suppliers had asked for extra charges on UPI payments in the preceding 10 days
2 sources
What people are saying
They (vendors) do not really attribute this to the MDR, but whenever the vendors wanted to pay using UPI, they were asked to pay some additional charge. They were clearly indicating that UPI will have an additional charge whereas when they would want to pay through cash, this charge would not be there
the key concern was the difficulty of avoiding large-value supplier payments.