Mobile retailers warn proposed UPI charges could squeeze thin margins

The All India Mobile Retailers Association has urged the Finance Ministry to exempt small and medium mobile retailers from any proposed UPI MDR or transaction charges. AIMRA said a 0.4 per cent fee could further squeeze already thin margins

New Delhi: The All India Mobile Retailers Association (AIMRA) has urged the Finance Ministry to exempt small and medium mobile phone retailers from any proposed Merchant Discount Rate (MDR) or transaction charges on UPI payments, saying they already operate on very thin margins.

In a letter to Finance Minister Nirmala Sitharaman, AIMRA said it represented more than 1.50 lakh small mobile phone and electronics retailers across India.

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The association said imposing a 0.4 per cent MDR on UPI transactions could directly increase costs for retailers at a time when the mobile retail sector is facing weaker sales and higher operating expenses.

“Mainline mobile retailers operate on extremely thin net margins, often between 0.75 per cent and 1.5 per cent. If an MDR charge of 0.4 per cent is imposed on UPI transactions — which account for a significant portion of digital payments — it will directly erode their survival margins,” the trade association said.

According to AIMRA, a retailer processing Rs 10 lakh to Rs 40 lakh in monthly UPI transactions could face an additional cost of Rs 4,000 to Rs 16,000 each month if a 0.4 per cent charge is introduced.

The association also pointed to rising smartphone prices, saying higher component and memory costs had pushed handset prices sharply higher since November 2025.

It claimed that entry-level smartphones that were available for around Rs 10,000 in 2025 had risen to about Rs 17,000 and could go up further to Rs 20,000 by December 2026.

AIMRA said retailers had already experienced a significant decline in business volumes and claimed that additional payment-related costs could put further pressure on smaller stores.

The retail association has sought a complete exemption from UPI MDR for small and medium retailers, continued access to low-cost digital payments, consultation with trade bodies before any fee structure is introduced, and broader policy support for the retail sector.