Mobile Phone Retailers Seek Exemption From UPI Charges

September 21, 2026

New Delhi: The All India Mobile Retailers Association (AIMRA) has requested the Finance Ministry to exempt small and medium mobile phone retailers from any proposed Merchant Discount Rate (MDR) or transaction charges on UPI payments, claiming that they are already operating on very thin business margins.

In a letter to Finance Minister Nirmala Sitharaman, AIMRA said it represents more than 1.50 lakh small mobile phone and electronics retailers across India.

The association said imposing a 0.4 per cent MDR on UPI transactions could directly increase costs for retailers at a time when the mobile retail sector is facing weaker sales and higher operating expenses.

“Mainline mobile retailers operate on extremely thin net margins, often between 0.75 per cent and 1.5 per cent. If an MDR charge of 0.4 per cent is imposed on UPI transactions — which account for a significant portion of digital payments — it will directly erode their survival margins,” the trade association said.

Retailers Calculate Potential UPI Costs

According to AIMRA, a retailer processing Rs 10 lakh to Rs 40 lakh in monthly UPI transactions could face an additional cost of Rs 4,000 to Rs 16,000 every month if a 0.4 per cent charge is introduced.

The association said such an additional cost would put further pressure on smaller retailers, whose profit margins are already limited.

Smartphone Prices Also Rising

AIMRA also pointed to rising smartphone prices, saying that higher component and memory costs have pushed handset prices sharply higher since November 2025.

It claimed that entry-level smartphones that were available for around Rs 10,000 in 2025 have increased to about Rs 17,000 and could rise further to around Rs 20,000 by December 2026.

The association said retailers have already experienced a significant decline in business volumes and claimed that additional payment-related costs could put further pressure on smaller stores.

AIMRA Seeks Complete UPI MDR Exemption

The retail association has sought a complete exemption from UPI MDR for small and medium retailers.

It has also called for continued access to low-cost digital payments and consultation with trade bodies before any fee structure is introduced.

AIMRA further sought broader policy support for the retail sector, citing the pressure faced by smaller retailers because of weaker business volumes, rising smartphone prices and higher operating expenses.