Kerala hotels to stop UPI payments above Rs 2,000 from October 15; TN traders boycott UPI

Kochi: Hotels and restaurants in Kerala plan to stop accepting UPI payments above Rs 2,000 from October 15 to protest a proposed Merchant Discount Rate (MDR) on high-value transactions. The move follows a one-day UPI boycott called by traders in Tamil Nadu on October 12, although the response there was mixed, with several shops continuing to accept digital payments.

The Kerala Hotel and Restaurant Association said the proposed charge could discourage customers and businesses from using digital payment systems. Association president G. Jayapal and general secretary N. Abdul Razak called for the proposal to be withdrawn or for the threshold to be raised so that the charge applies only to transactions above Rs 10,000.

The proposed MDR is reportedly 0.4% on person-to-merchant UPI transactions above Rs 2,000. The proposal has prompted concerns among traders over the potential cost of accepting digital payments.

In Tamil Nadu, the Vanigar Sangangalin Peramaippu called for a one-day boycott on October 12. However, participation varied across locations in Chennai. Some shopkeepers continued accepting UPI payments, citing customers’ preference for digital transactions.

TN Ashokan, honorary adviser to the Chrompet town branch, told The New Indian Express that nearly 90% of customers preferred UPI. A shopkeeper in Tambaram also said customers insisted on using UPI for purchases worth a few hundred rupees, adding that the proposed charge applied only to transactions above Rs 2,000.

Posters announcing the boycott were not visible in several parts of South Chennai. Traders’ representatives, however, reported a stronger response in areas including Koyambedu, Kodambakkam, KK Nagar, Virugambakkam, Villivakkam and Perambur, as well as in Pudukkottai and Namakkal.

Kerala’s planned action from October 15 signals that opposition to the proposed fee is continuing beyond Tamil Nadu’s one-day protest.