UPI payments no longer accepted at PDS shops owing to interchange fee

 

There were also issues in receiving money through QR codes installed by Paytm, whose wallet was banned by RBI from March 16.  Representative Image

CHENNAI: The cashless UPI payment option introduced at fair price shops a few months ago has been withdrawn in Chennai and several other locations as family rations cardholders are being told to pay only by cash.

Sources from the cooperation department, which oversees the ration shops, said UPI transactions on Paytm and Google Pay applications now incur a 0.5-1.1% interchange fee for transactions exceeding Rs 2,000 per day, following the implementation of revised rules for UPI transactions.

“We have explicitly informed Paytm and other service providers that there should be no additional charge for UPI payments at ration shops. The matter will be looked into,” N Subbaiyan, registrar of cooperative societies, told TNIE.

Although the revised rules came into effect from January this year, the issue caught the attention of the department only a few weeks back. There were also issues in receiving money through QR codes installed by Paytm, whose wallet was banned by RBI from March 16. The UPI system was discontinued in North Chennai, Kancheepuram, Tiruvallur and other places, said sources.

“Initially, we did transactions amounting to about Rs 5,000 to Rs 6,000 daily. However, after restrictions were imposed on operating Paytm wallet, officials gradually discontinued the UPI system and instructed us to collect cash,” an employee at a ration shop in Korattur said.

Consumers face difficulty in tendering change as ATMs mostly dispense Rs 500 notes, occasionally Rs 200 notes. “When purchasing one kg of sugar for Rs 26, cardholders often handover Rs 500 currency, leading to occasional verbal arguments. However, since the implementation of the UPI system, this was resolved,” he added.

The digital payment system was implemented across PDS shops in September last year in a phased manner. QR codes were installed with bank accounts of central cooperative banks. The initiative brought huge relief to both PDS workers and the general public, who frequently quarrelled over returning change for higher denomination currencies like Rs 500 and Rs 200.

“I have been using a mobile app to pay for items at the PDS shop during the last two months. However, last week, the staff informed they would only accept cash for purchasing sugar, pulses and palmolein oil. I went to an ATM to withdraw money at 12.20 pm, but by the time I reached the shop, it was closed for lunch at 12.35 pm. I had to return later to purchase the entitlements,” R Rajamanickam, a resident of Korattur said.