Kolkata: Even as restaurant bodies and eateries gauge UPI use and the rise in expenses due to the charge levied on merchants for transactions above Rs 2,000, many have decided to discourage customers from using the mode of payment to get around it. Restaurants in Kolkata receive 30%-50% of their payments through UPI now, which could add up to a significant amount and prove to be a burden on their finances. This could eventually force a price rise, they said.Restaurant bodies said they plan to move Centre to roll it back. While many said it could be a significant burden, some argued that a price rise was the only viable solution. It may not, however, come immediately since restaurants are keen to avoid passing on the burden to consumers during the pre-festive season when footfall starts spiking.National Restaurants’ Association of India (NRAI) described the charge as ‘challenging’ for the food business and plans to move Union commerce and industry ministry to push for a rollback. “This will affect the entire food business in some way or the other. From the restaurants’ point of view, they might initially discourage UPI, which goes against the govt’s policy of a cashless economy. For now, we will take the hit and see how it goes. But the bigger businesses will have to pass on the burden to customers at some point. It may not affect all, but it has the potential to have a debilitating impact for the rest,” said NRAI national president Sagar Daryani.Hotel and Restaurants’ Association of Eastern India (HRAEI) has asked members to wait for a month once the charge under Merchant Discount Rate (MDR) framework rolls out from Oct 15. It has convened a meeting on the issue on Sept 25. “The charges will depend on the volume of UPI transactions, which is significantly high at the moment. So, restaurants with high footfalls can expect a substantial burden. It will be difficult unless we pass it on to customers but it will not happen till at least mid-Nov, if at all. We have asked our member restaurants to assess the expenses,” said Sudesh Poddar, president of HRAEI and owner of Songhai-Manthan and MS Bar & Lounge.Daryani added that NRAI will not be advising its members now. “We will wait and take it up at the national level with the govt,” said Daryani.A significant part of transactions at Peter Hu, Mocambo and Peter Cat on Park Street happens through UPIs. “The impact is going to be significant. UPI payments are by far the most widely used compared to cash, which is negligible, and credit cards which are far behind. If profit margins are affected, then a price rise will be inevitable. Else, we will discourage UPI which may not be easy,” said Siddharth Kothari of Peter Hu.Charges for credit cards are often much higher, said some restaurant owners. “While the UPI charge is a mere 0.4% with a Rs 300 cap on it, we fear a rise in ingredient prices since our vendors may choose to pass on the burden to buyers. That may affect us majorly and force us to revise prices. But we will wait and watch for now. UPI transactions form a significant part of our total sales, so an impact is not ruled out,” said Anirban Sengupta, owner of WhatsUp Café on Southern Avenue.Around 30% of transactions at Oasis on Park Street happen through UPI. “Credit card charges are often around 2%-3% of the bill, which is steep. But we don’t charge it to the customer. So, I believe we can absorb this at the moment. Also, very few of our bills cross Rs 2,000 so the impact will be minimum for us,” said owner Pratap Daryanani.The charge is a setback for the food and beverages sector where margins are lower than most sectors, said Shiladitya Chaudhury, owner and co-founder of Oudh 1590. “We don’t get GST inputs like others,” added Chaudhury.
