Kerala Hotels and Restaurants to stop accepting UPI payments above ₹2,000 from Oct 15

The Kerala Hotel and Restaurant Association (KHRA) announced on Tuesday that its members will stop accepting Unified Payments Interface (UPI) payments above ₹2,000 from October 15. This protest stems from the proposed merchant discount rate (MDR) on digital transactions, which KHRA claims would cause a significant financial burden on small businesses.

The proposed 0.4% MDR framework, according to KHRA president G. Jayapal, would increase costs for hotels, restaurants, and lodges, many of which were encouraged to adopt digital payments already facing rising material costs. Jayapal stated that the industry is already struggling with high prices, and this additional financial strain could plunge them into a crisis.

KHRA president Jayapal and general secretary N. Abdul Razak emphasized that UPI payments have become standard in the industry, and extra charges would disproportionately impact businesses with limited margins. The association is seeking to either scrap the extra charges or raise the limit to ₹10,000 from the proposed ₹2,000. In response to the opposition, members of trade organizations in Ernakulam organized a torch march in the city, demanding the withdrawal of the proposed UPI MDR charges.

The National Payments Corporation of India (NPCI) later announced that the implementation of the proposed 0.4% MDR on transactions exceeding ₹2,000 has been deferred, with a revised implementation date to be decided after Diwali. This postponement alleviates concerns among traders about the cost of accepting digital payments, though the debate over digital payment costs continues.