India, Sept. 16 -- As the government moves to end free UPI payments after six years with 0.4% Merchant Discount Rate, the Retailers Association of India (RAI) on Wednesday reportedly said the move could reverse gains in digital payment adoption among small retailers ahead of the festive season.

This comes after the government introduced a 0.4 per cent fee on transfers worth more than Rs.2,000 made to merchants through the platform from October 15, while explicitly ring-fencing everyday person-to-person transactions as well as small payments from any charge.

The MDR, capped at Rs.300 for transactions of Rs.75,000 and above, keeps consumers outside its ambit but places the cost on merchants, many of whom operate on thin margins, RAI said,...