CAIT welcomes MDR charges deferment on select UPI transactions

CAIT welcomed the Centre's decision to defer the proposed MDR on select UPI transactions, saying it will protect traders and MSMEs from additional costs, encourage digital payment adoption, and support business growth during the festive and wedding season.

New Delhi: The Confederation of All India Traders (CAIT) on Tuesday welcomed the government’s decision to defer the proposed Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) transactions, saying the move will protect traders’ interests and support the continued growth of digital payments during the festive season.

The traders’ body expressed gratitude to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for what it described as a timely and pragmatic decision, particularly at a time when traders and micro, small and medium enterprises (MSMEs) are witnessing higher business activity driven by festive and wedding season demand.

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“The decision is timely and pragmatic, particularly during the crucial festive and wedding season, when millions of traders and MSMEs depend on higher business volumes,” it said.

According to CAIT, the deferment will help merchants avoid additional transaction costs that could have strained businesses operating on thin margins.

“Additional transaction costs could have placed an avoidable burden on merchants operating on thin margins and discouraged the wider acceptance of digital payments,” the trader’s body added.

The organisation said the proposed levy might also have slowed the adoption of digital payments among traders.

The development comes weeks after a delegation of around 20 trade leaders led by CAIT Secretary General Praveen Khandelwal met the Finance Minister at Kartavya Bhawan in New Delhi on September 30.

CAIT said it had also been coordinating with trade associations across the country to ensure that merchants’ concerns were effectively communicated to the government.

Commenting on the decision, Khandelwal said CAIT fully supports digital payments but believes the system should remain affordable and sustainable for merchants, especially small businesses.

“We sincerely thank Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for understanding the concerns of traders and taking a positive decision. CAIT supports digital payments, but the system must remain affordable and sustainable for merchants, especially small businesses,” he added.

“This deferment will strengthen traders’ confidence and reinforce the Government’s partnership with the trading community in building a stronger Digital India,” Khandelwal noted.