Archive · 18 Sep 2026
UPI Charges Push Delhi Retailers Toward Cash Payments
Some shops will soon have to pay a small fee when customers use UPI for purchases above Rs 2,000.
Customers will not pay this fee directly.
The fee will be 0.4% and will have a maximum limit of Rs 300 for very large payments.
Shopkeepers in Delhi's Lajpat Nagar market are worried because many of their sales are above Rs 2,000.
They say the new cost could reduce their profits.
Some may ask customers to use cash instead.
Customers say carrying cash is inconvenient after using UPI for so long.
Smaller vendors and some types of transactions have different exemptions or rates.
A 0.4% merchant discount rate will apply to eligible UPI merchant payments above Rs 2,000 from October 15.
Merchants, rather than customers, will pay the charge, which is capped at Rs 300 for transactions of Rs 75,000 or more.
Lajpat Nagar retailers fear the fee will raise costs, especially for businesses selling higher-value products.
Some shopkeepers say they may encourage customers to pay in cash to protect already-tight profit margins.
Consumers say returning to cash would be inconvenient after widespread adoption of UPI payments.
- Who
- Delhi retailers, customers, and the government are affected by the new UPI merchant charge.
- What
- A 0.4% merchant discount rate will apply to eligible person-to-merchant UPI transactions above Rs 2,000.
- When
- The charge begins on October 15.
- Where
- The issue has caused concern among retailers in Delhi's Lajpat Nagar Central Market.
- Why
- The charge is being imposed on eligible merchant transactions, but retailers must bear the cost while customers remain exempt.
Retailers and Cash Concerns
Consumers and Digital Convenience
Who should bear the cost?
Retailers and Cash Concerns
Retailers say the charge adds to existing expenses, including taxes and card-payment charges, and should be withdrawn or not placed on merchants.
Consumers and Digital Convenience
Customers are exempt from paying the charge directly, but they want UPI to remain convenient and do not want the cost to lead shops to demand cash.
Cash versus UPI
Retailers and Cash Concerns
Some shopkeepers say they may encourage cash payments because absorbing the fee would put pressure on tight margins.
Consumers and Digital Convenience
Consumers say carrying cash everywhere is impractical after years of widespread UPI use.
Impact on businesses
Retailers and Cash Concerns
Retailers selling expensive products say they will be disproportionately affected because many of their transactions exceed Rs 2,000.
Consumers and Digital Convenience
The charge does not apply to every UPI payment; transactions up to Rs 2,000 remain free, and certain smaller vendors and sectors have exemptions or different rates.
- Merchant discount rate
- 0.4% on eligible person-to-merchant UPI transactions above Rs 2,000
- Effective date
- October 15
- Maximum charge
- Rs 300 for transactions of Rs 75,000 and above
- Customer liability
- Customers will not pay the merchant discount rate directly
- Small transactions
- Person-to-merchant UPI payments up to Rs 2,000 remain free
- Retailer concern
- Some merchants may encourage customers to pay in cash
- Sector-specific rates
- Railways, telecom, insurance, and fuel transactions will attract a flat Rs 5 fee above the applicable threshold