The Supreme Court of India has refused to stay the Centre's decision to impose a Merchant Discount Rate (MDR) on person-to-merchant UPI transactions above Rs 2,000, rejecting the plea challenging the framework, the Indian Express reported.
Under the Centre's framework, a 0.4 per cent MDR will be charged on person-to-merchant UPI payments above Rs 2,000 starting October 15. The court's refusal to intervene means the charge will take effect as planned.
What the decision means
The MDR is a fee paid by merchants to banks and payment service providers for processing digital transactions. UPI transactions have so far largely been free of such charges for merchants, and the introduction of the levy marks a significant shift in India's digital payments ecosystem.
The decision arrives after the court agreed to hear a public interest litigation challenging the merchant fee. With the stay plea now rejected, the focus shifts to October 15, when the 0.4 per cent charge formally begins on larger merchant UPI payments.
Context
The ruling is an important development for India's rapidly expanding digital payments landscape, where UPI has become the dominant mode of retail transactions. Consumer groups and industry participants have been watching the case closely for its implications on transaction costs for merchants and, potentially, on how payments are routed at checkout counters across the country.
Sources: SC refuses to stay MDR on UPI payments
Under the Centre's framework, a 0.4 per cent MDR will be charged on person-to-merchant UPI payments above Rs 2,000 starting October 15. The court's refusal to intervene means the charge will take effect as planned.
What the decision means
The MDR is a fee paid by merchants to banks and payment service providers for processing digital transactions. UPI transactions have so far largely been free of such charges for merchants, and the introduction of the levy marks a significant shift in India's digital payments ecosystem.
The decision arrives after the court agreed to hear a public interest litigation challenging the merchant fee. With the stay plea now rejected, the focus shifts to October 15, when the 0.4 per cent charge formally begins on larger merchant UPI payments.
Context
The ruling is an important development for India's rapidly expanding digital payments landscape, where UPI has become the dominant mode of retail transactions. Consumer groups and industry participants have been watching the case closely for its implications on transaction costs for merchants and, potentially, on how payments are routed at checkout counters across the country.
Sources: SC refuses to stay MDR on UPI payments
