The Supreme Court is set to hear a public interest plea on Monday challenging the Centre's decision to impose a merchant discount rate on large Unified Payments Interface transactions, putting the spotlight on one of the most closely watched financial-policy debates in the country.
The petition, filed by advocate Anjan Datta, questions the legality of the 0.4 per cent charge on person-to-merchant UPI transactions above ₹2,000, which takes effect from October 15. The matter is listed before a bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V. Mohana, according to The Hindu and The Tribune.
The plea argues that the fee was introduced without adequate statutory safeguards, transparency and public consultation. It challenges the amended Section 10A of the Payment and Settlement Systems Act, 2007, along with the Finance Ministry's September 14 notification and the September 15 merchant discount rate framework. The Centre, the Reserve Bank of India and the National Payments Corporation of India have been named as respondents.
What the levy looks like
Under the framework, UPI merchant payments above ₹2,000 will attract a 0.4 per cent charge, capped at ₹300 per transaction for amounts of ₹75,000 and above. Certain thin-margin sectors — including railways, telecom, insurance, fuel and agricultural inputs — will pay a flat ₹5 per transaction, while securities transactions will face a 0.02 per cent rate with the same ₹300 cap. Person-to-person transfers remain free, and the government has maintained that around 96 per cent of merchant transactions will remain unaffected.
The outcome of Monday's hearing could shape how India's dominant digital payments rail treats merchants and consumers in the months ahead.
Sources:
- "MDR on UPI: SC to hear plea challenging imposition on September 28" — The Hindu
- "SC to take up petition against imposition of 0.4% MDR on UPI payments of above Rs 2,000 on Monday" — The Tribune
The petition, filed by advocate Anjan Datta, questions the legality of the 0.4 per cent charge on person-to-merchant UPI transactions above ₹2,000, which takes effect from October 15. The matter is listed before a bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V. Mohana, according to The Hindu and The Tribune.
The plea argues that the fee was introduced without adequate statutory safeguards, transparency and public consultation. It challenges the amended Section 10A of the Payment and Settlement Systems Act, 2007, along with the Finance Ministry's September 14 notification and the September 15 merchant discount rate framework. The Centre, the Reserve Bank of India and the National Payments Corporation of India have been named as respondents.
What the levy looks like
Under the framework, UPI merchant payments above ₹2,000 will attract a 0.4 per cent charge, capped at ₹300 per transaction for amounts of ₹75,000 and above. Certain thin-margin sectors — including railways, telecom, insurance, fuel and agricultural inputs — will pay a flat ₹5 per transaction, while securities transactions will face a 0.02 per cent rate with the same ₹300 cap. Person-to-person transfers remain free, and the government has maintained that around 96 per cent of merchant transactions will remain unaffected.
The outcome of Monday's hearing could shape how India's dominant digital payments rail treats merchants and consumers in the months ahead.
Sources:
- "MDR on UPI: SC to hear plea challenging imposition on September 28" — The Hindu
- "SC to take up petition against imposition of 0.4% MDR on UPI payments of above Rs 2,000 on Monday" — The Tribune
