BENGALURU: With the central government firm on levy a 0.4 per cent Merchant Discount Rate from merchants for digital transactions of more than Rs 2,000, hoteliers in the city seem to be moving back to cash transactions and dumping UPI payments.
From October 15, the Centre has decided to levy a 0.4 percent Merchant Discount Rate (MDR) from merchants on the UPI digital payment system. Following this, businesses have decided to purchase daily use items in cash only and also receive cash from customers.
Hotel entrepreneurs have expressed outrage saying this policy will be a burden for small and medium class businesses. Roopa Shastry, a hotelier in the city, said, “UPI was introduced with the idea of a cashless India. The 0.4 per cent MDR will affect us because prices of other inputs have already gone up. The MDR on UPI transactions is a shock for us”.
Further, she said, “UPI became popular because of the common people and small businesses, not the big industries. For all daily transactions like LPG cylinders, vegetables, etc., we are dependent on digital payments. If the governmnet imposes a tax on this also, why should we use it? The government should not use small businesses as a source of mopping up revenue and we demand that the MDR should be scrapped. They should have had a discussion with small businesses before bringing it into effect”.
Yashas, a student, said, “It will definitely be a burden on people. We can’t carry cash all the time and UPI offers convenience, but if businesses start insisting on cash transactions, it will be difficult”.
“We have to make payments in hostels, college and paying guest accommodations. The MDR will be a burden on us to manage our expenses. People don’t carry cash anymore and we have adopted to UPI payments. It will be difficult to swithc to cash payments”, said Tanu, another student.
