SRINAGAR, SEPTEMBER 17: The Kashmir Traders and Manufacturers Federation (Regd) has expressed serious concern over the proposed imposition of merchant transaction charges on digital UPI payments above the threshold limit, urging the Ministry of Finance and the Reserve Bank of India (RBI) to withdraw the proposed charges with immediate effect.
In a press statement issued by its media cell, the federation said the proposed charges would place an additional financial burden on micro, small and medium enterprises (MSMEs), retail shopkeepers and local traders operating on thin profit margins.
The statement was issued by the federation’s Chairman, Abrar Khan, and President, Hilal Mandu.
Traders cite thin margins, rising operating costs
The federation said the commercial landscape of Jammu & Kashmir is predominantly driven by MSMEs, standalone retail shops and local trading enterprises.
According to the statement, the trading community has embraced the national initiative promoting a cashless digital economy and encouraged customers to shift from cash payments to UPI transactions.
“Introducing operational fees on digital transactions creates an unintended financial strain on small retail units that operate on minimal operating margins and cannot afford additional transaction expenses,” the federation said.
It added that local businesses are already facing economic headwinds, rising operating overheads and challenges linked to the region’s geographical and supply-chain conditions.
Warns of setback to digital payments
The federation said digital payments have become an essential mechanism for daily commercial transactions and warned that additional charges could discourage merchants from using the digital payment ecosystem.
“Subjecting these everyday business payments to additional levies risks forcing small merchants back toward cash transactions,” the statement said.
It argued that imposing transaction costs on digital payments could undermine the progress made in financial inclusion and digital adoption across Jammu & Kashmir.
The federation called for commercial policies that support local markets through incentives and zero-cost digital payment infrastructure rather than adding financial burdens to small businesses.
Seeks intervention by Finance Ministry, RBI
The Kashmir Traders and Manufacturers Federation urged the Ministry of Finance, the Reserve Bank of India and other relevant monetary authorities to assess the ground realities faced by small regional enterprises before introducing transaction charges.
The federation appealed to the government to maintain an absolute zero-cost digital payment infrastructure and withdraw the proposed UPI transaction charges with immediate effect.
It said the move was necessary to safeguard the viability and growth of small businesses in Jammu & Kashmir and across the country.
