Ghaziabad traders push for cash payments amid new UPI MDR charges

Traders in Ghaziabad, Uttar Pradesh, have begun displaying notices requesting customers to pay in cash only, following the implementation of the Merchant Discount Rate (MDR) for UPI transactions. Under the new rules, merchants receiving more than ₹1 lakh per month via UPI are subject to a 0.4% charge on transactions exceeding ₹2,000. While the government has clarified that the MDR is intended to cover costs for banks and payment service providers rather than being a direct tax, and that merchants should not pass this cost to customers, local businesses are expressing significant concern.

In response to these charges, various unverified apps and websites have surfaced on social media claiming to help merchants avoid the MDR. These tools suggest splitting large payments into multiple smaller transactions of ₹1,999 or less to stay below the threshold. However, experts warn that using such unverified third-party applications poses serious security risks, including the potential theft of private information and banking credentials.