The All India Mobile Retailers Association (AIMRA) has urged the Union Finance Ministry to exempt small and medium mobile retailers from any proposed Merchant Discount Rate (MDR) or transaction charges on UPI payments, citing pressure on already thin business margins.
In a letter to Finance Minister Nirmala Sitharaman, AIMRA said it represents more than 1.50 lakh small mobile phone and electronics retailers across India.
The association argued that imposing a 0.40% 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.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
"Mainline mobile retailers operate on extremely thin net margins (often between 0.75% and 1.50%). If an MDR charge of 0.40% is imposed on UPI transactions—which account for a significant portion of digital payments—it will directly erode their survival margins," it stated.
Also Read | 'Patently False & Misleading': DFS Rejects Allegation That MDR Introduced Under External Influence
AIMRA said mobile retailers typically operate on net margins of around 0.75% to 1.50%.
According to the association, 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 0.40% charge is introduced.
The association also pointed to rising smartphone prices, saying component and memory costs have pushed handset prices sharply higher since November 2025.
It claimed entry-level smartphones that were available for around Rs 10,000 in 2025 have moved to about Rs 17,000 and could reach Rs 20,000 by December 2026.
Also Read | UPI MDR To Attract 18% GST; Merchants Can Claim Input Tax Credit: Official
AIMRA said retailers have already experienced a significant decline in business volumes and warned that additional payment-related costs could put further pressure on smaller stores.
The 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.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
