He said the Centre first used demonetisation and subsequently UPI to encourage digital payments, creating a habit among citizens before introducing charges on certain transactions. He also questioned if merchants would absorb the 0.4 per cent MDR or pass the cost on to customers

In a letter dated September 16 and addressed to the RBI Governor and the Chief General Manager of its Department of Payment and Settlement Systems, Association president Chetan Modi said the proposed charges could put financial pressure on fuel retailers