The Kerala Hotel and Restaurant Association (KHRA) has announced that its members will stop accepting UPI payments exceeding INR 2,000 from October 15, protesting the introduction of a 0.4% merchant discount rate (MDR) on eligible UPI transactions. The association said the additional charge would increase operating costs for hotels, restaurants and lodges already facing rising raw material prices.
KHRA president G. Jayapal said customers would have to pay in cash for transactions above the specified limit. He argued that the hospitality industry was being financially burdened despite having been encouraged to adopt digital payment systems.
“The industry is already suffering from the rising cost of raw materials. We feel cheated, especially since we were all encouraged to shift to digital payments and are now being charged extra for them,” Jayapal said, adding that the additional cost could worsen the financial pressure on small establishments.
In a joint statement, Jayapal and KHRA general secretary N. Abdul Razak said UPI had become a widely used payment method across the hotel and restaurant industry. The association has demanded that the additional charges be withdrawn or that the transaction threshold be increased from INR 2,000 to INR 10,000.
The announcement comes amid wider opposition from trade associations in Kerala to the proposed UPI charges. Members of trade organisations in Ernakulam also staged a torch march demanding their withdrawal.
The development could affect payment practices at participating establishments if the association proceeds with the proposed restriction from October 15.
