CAIT Kashmir welcomes new UPI framework, seeks clarity on MDR implementation

Srinagar, September 18: The Confederation of All India Traders (CAIT) Kashmir Chapter has welcomed the Government of India’s new UPI framework, saying the measures will help strengthen the security, resilience and sustainability of India’s rapidly expanding digital payments ecosystem.

The traders’ body, however, has sought greater clarity on the implementation of provisions relating to merchant discount rates (MDR), particularly the ₹1 lakh monthly threshold applicable to certain person-to-merchant (P2PM) transactions.

CAIT Kashmir Chapter President Farhan Kitab said traders in Kashmir had widely adopted UPI and remained committed to supporting India’s digital payments transition.

The chapter welcomed provisions including zero UPI charges for consumers, no MDR on applicable merchant transactions up to ₹2,000, zero MDR for eligible P2PM merchants receiving up to ₹1 lakh per month, and a maximum MDR cap of ₹300 on qualifying higher-value transactions.

It also welcomed the continuation of zero charges for person-to-person transactions.

According to the Government, approximately 96% of P2M transactions will remain unaffected under the new framework, providing protection for a large share of everyday retail transactions.

“We appreciate the Government’s balanced approach towards strengthening UPI while protecting consumers and small merchants,” Kitab said. “Kashmir’s traders have wholeheartedly adopted digital payments, and we will continue to support initiatives that make India’s digital payment ecosystem more secure, efficient and sustainable.”

CAIT seeks clarity on implementation

While welcoming the framework, CAIT Kashmir Chapter has called for detailed implementation guidelines to prevent confusion and unintended financial liabilities for traders.

The chapter has sought clarification on how the ₹1 lakh monthly P2PM threshold will be calculated, particularly in cases where a business operates multiple QR codes or bank accounts.

It has also sought clarity on the treatment of merchants after they cross the ₹1 lakh threshold, including confirmation that MDR liabilities would not be imposed retrospectively.

The traders’ body has further called for clear provisions covering MSMEs and established retailers whose UPI receipts may exceed ₹1 lakh a month despite operating on relatively modest margins.

CAIT has also sought transparent merchant-level MDR statements showing the transaction amount, applicable charge and net amount credited to the merchant.

The chapter said clear rules were also needed for advance payments, part-payments, refunds and cancelled transactions.

It called for a simple and time-bound grievance redress mechanism to address cases involving incorrect MDR deductions.

CAIT Kashmir Chapter said these clarifications would facilitate smoother implementation of the framework and help prevent disputes and confusion among traders.

The chapter reiterated its support for the Digital India and Viksit Bharat initiatives and said Kashmir’s retail community would continue to engage constructively with the Government, NPCI and banking institutions on strengthening digital commerce while addressing the practical concerns of traders.