UPI Fee Above ₹2,000: 76% May Switch to Cash or Cards — SkimNews
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- The 0.4% MDR on UPI P2M transactions above ₹2,000 is set to take effect on 15 October, with merchants liable for the charge.
- LocalCircles' consumer survey — drawing over 67,000 responses from UPI users across 291 districts — found that 76% would move larger payments off UPI if an extra cost is imposed on transactions above ₹2,000.
- Only 14% of consumers said they would continue paying through UPI and absorb the fee, while 27% would pay in cash, 26% would switch to credit cards, 14% to debit cards, and 4% to bank transfers, NEFT or IMPS.
- For purchases above ₹2,000 specifically, 26% of respondents said they would most often use credit cards and another 26% cash, with only 20% sticking with UPI — suggesting cards plus cash could capture 39% of such payments.
- A separate LocalCircles merchant survey of over 32,000 businesses across 242 districts found only 17% willing to bear the 0.4% MDR, while 41% would not bear any MDR at all and 15% set 0.04% as their preferred ceiling.
- Cash could see a revival for higher-value purchases, with 26% of respondents saying they would most often use cash if UPI becomes chargeable, according to LocalCircles.
Why it matters: With only 14% of consumers willing to absorb the charge and just 17% of merchants ready to bear it, the October 15 MDR regime faces resistance on both sides of the transaction — threatening to push 39% of payments above ₹2,000 toward credit/debit cards and revive cash usage that digital policy had worked to suppress.
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