Kerala Textile & Garments Association warns UPI charges could fuel inflation, drive merchants back to cash

The Kerala Textile & Garments Association (KTGA) has opposed the proposed imposition of Merchant Discount Rate (MDR) charges on Unified Payments Interface (UPI) transactions, warning that the move would increase costs for businesses and eventually burden consumers.

KTGA State president Pattabhiraman T.S. said UPI had evolved into essential public digital infrastructure and had generated significant benefits for governments, banks, payment platforms and the wider economy. Merchants, who had played a key role in driving the adoption of cashless payments, should not be made to bear the cost of maintaining the system, he said. “Merchants are the last-mile drivers of the country’s cashless economy. Charging them for every UPI transaction would penalise the very segment that has helped make digital payments a part of everyday commerce,” Mr. Pattabhiraman said.