Mumbai UPI Users Revolt: 80% Refuse to Pay MDR Fees Above ₹2,000

A recent survey by LocalCircles has found that four out of five Mumbai residents are unwilling to bear the Merchant Discount Rate (MDR) fee on Unified Payments Interface (UPI) transactions exceeding ₹2,000. The fee, set at 0.4%, is scheduled to take effect on October 15, and the survey indicates that a significant majority of users would rather revert to traditional payment methods than pay the extra charge.

The survey, which gathered responses from thousands of Mumbai residents, highlights the potential backlash against the new MDR fee. According to LocalCircles, 80% of respondents stated they would switch to credit or debit cards, or cash, if the fee is implemented. This comes amid concerns that the fee could discourage digital transactions and hamper the government's push for a cashless economy. The MDR fee is intended to cover the costs of processing UPI transactions, but critics argue it places an undue burden on consumers and merchants.

The findings suggest that the MDR fee could lead to a decline in UPI usage for higher-value transactions, affecting digital payment adoption in India. If a large segment of users shifts to other payment modes, it could impact the revenue of payment service providers and the overall digital payments ecosystem. The government and the National Payments Corporation of India (NPCI) may need to reassess the fee structure or introduce measures to mitigate the impact on consumers. As the October 15 deadline approaches, stakeholders will be closely watching the response from users and the potential adjustments to the policy.