Street vendors may limit UPI use if MDR is introduced
A study by the Indian School of Business shows over half of surveyed vendors would reduce digital payment acceptance if charges are applied.
More than half of street vendors surveyed across 14 States and Union Territories would likely decrease their acceptance of Unified Payments Interface (UPI) payments if a proposed merchant discount rate (MDR) is implemented, according to a report by The Hindu.
The Indian School of Business (ISB) study was conducted between September 24 and October 10, covering 722 vendors across 64 urban local bodies in locations including Delhi, Maharashtra, and Tamil Nadu.
The survey found that 67 per cent of respondents currently accept UPI payments, while approximately 70 per cent said their payments to suppliers exceed ₹2,000, which could expose them to a proposed 0.4 per cent charge.
In Tier-I cities, 53 per cent of vendors said they would reduce UPI acceptance, compared to 45 per cent each in Tier-II and Tier-III locations.
Regarding the cost, 30 per cent of Tier-I vendors, 14 per cent in Tier-II, and 19 per cent in Tier-III said they would pass the charge to customers.
The findings were presented by ISB Centre for Analytical Finance Executive Director Prasanna Tantri and co-authors Anand Sudhakaran and Mohan Ramanath.