Seafood Traders Seek Zero MDR On UPI Payments, Say Digital Charges Could Hurt Traditional Fishermen’s Livelihoods

Mumbai: Seafood traders in the city have urged the Central Government to provide zero or concessional Merchant Discount Rate (MDR) on UPI transactions in the fisheries sector, arguing that percentage-based charges on high-value fish transactions could disproportionately affect the livelihoods of traditional fishermen.

Fisheries Sector Seeks Flat MDR Structure Like Agriculture

The traders have demanded that fishing be considered a thin-margin livelihood sector, like agriculture, and be levied a flat-rate MDR instead of a proportional charge based on sales.

The Akhil Maharashtra Machhimar Kriti Samiti (AMMKS) has submitted a representation to Union Finance Minister Nirmala Sitharaman seeking relief for traditional fishermen, fishermen’s cooperative societies, Fisheries Farmer Producer Organisations (FFPOs), traders, small fish vendors and micro and small fisheries enterprises.

AMMKS Highlights Impact of New UPI MDR Framework

According to the organisation, under the new UPI MDR framework, specified merchant transactions above Rs 2,000 attract an MDR of 0.4%, while certain essential and thin-margin sectors, including agricultural inputs, are subject to a flat Rs 5 MDR.

AMMKS president Devendra Damodar Tandel said fishing should also be considered a thin-margin livelihood sector, as the value of a fish transaction does not represent the fisherman’s actual income.

High Operational Costs Reduce Fishermen’s Actual Income

“Fishermen have to meet substantial costs towards diesel, ice, crew wages, fishing gear, boat and engine maintenance, transportation and other operational expenses. A percentage-based charge on the gross value of fish transactions can disproportionately affect the livelihood income of traditional fishermen,” Tandel said.

The organisation cited the example of a Rs 50,000 UPI transaction, which would attract Rs 200 as MDR at 0.4%. It said fishermen could routinely undertake transactions worth Rs 30,000, Rs 50,000 or even Rs 1 lakh, but these amounts cannot be treated as their profits as operational costs have to be deducted.

Wholesalers Say Rs 2,000 MDR Limit Is Too Low

Vijay Desai, a wholesale seafood dealer at the Chhatrapati Shivaji Maharaj Market near Crawford Market, said the Rs 2,000 exemption from MDR was too low for the fish trade, where products have high prices but margins are low.

“Rs 2,000 may be fine for retail fish traders, but it is cumbersome for wholesalers. People will resort to cash transactions or cheque payments, which are a waste of time,” said Desai.

AMMKS said additional costs on digital transactions could discourage small fishermen and fish traders from using UPI and potentially encourage a return to cash transactions, affecting efforts towards wider digital financial inclusion.

AMMKS has sought either zero MDR for fisheries transactions or their inclusion in the Rs 5 flat-MDR category applicable to specified essential and thin-margin sectors. It has also requested a substantially higher zero-MDR threshold for small fishermen and fisheries enterprises.

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