Diwali season often involves the purchase of new clothes, electronic items, sweet dishes, and gifts for your family and friends. With UPI being one of the simplest modes of payment, most customers would rather scan the QR code than use cash.
However, with recent news on UPI merchant fees doing the rounds, one burning question comes to mind: Can a shop charge you for UPI transactions? The short answer to this is no. Shops cannot officially pass UPI merchant charges on to customers.
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New UPI Merchant Charges
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The merchant discount rate (MDR) will apply to some specific UPI transactions made to businesses. According to the proposed system, those merchant transactions that exceed Rs 2,000 will be charged a 0.4% fee, with a maximum of Rs 300 per transaction.
However, there is an important update for Diwali shopping. The NPCI has deferred the implementation of the MDR system until after Diwali.
The MDR will not apply to payments of Rs 2,000 or less. Small merchants receiving up to Rs 1 lakh per month through eligible UPI QR payments will also continue to be exempt from MDR.
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Who Will Pay the Fee?
The merchant, not the customer, is responsible for the applicable MDR. Banks have been advised to ensure that businesses do not pass this cost on to customers. UPI apps are also prohibited from adding platform fees or hidden charges under the announced framework.
So, if you buy a saree worth Rs 3,000 or a television worth Rs 25,000, a shop should not add an extra amount to your bill simply because you choose UPI.
What Should Shoppers Do?
Before completing your Diwali purchase, check your bill carefully. If a shop adds a separate UPI charge, ask the seller why it has been included. Keep your bill and payment confirmation if you need to raise a complaint.
UPI merchant charges are meant to be borne by eligible businesses, not passed on to shoppers. Enjoy your festive shopping, but remember to check your bill before paying.
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