New Delhi, Aug. 6 -- Amid reports that government may allow Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions above Rs 2,000 to businesses, Saurabh Sanyal, Secretary General of ASSOCHAM, has said that it could prove to be a setback for micro, small and medium enterprises (MSMEs) as the additional transaction cost may increase their financial burden and discourage digital payments.

"MDR is going to be a setback for smaller businesses because MDR is basically a fee on digital transactions. As of today, the discussions are that it could be around 0.25 to 0.5 per cent on transactions above Rs 2,000. For MSMEs, which undertake a large number of digital transactions, this will become a significant additional cost. I...