Supreme Court Declines to Pause UPI Merchant Fees

The Supreme Court on September 28 declined to pause a proposed fee framework for certain higher-value UPI merchant payments, leaving it scheduled to take effect on October 15 while the legal challenge proceeds. The court directed the Centre, the Reserve Bank of India and the National Payments Corporation of India to respond to the petition within four weeks. The petition, filed by advocate Anjan Datta, challenges a 0.4% Merchant Discount Rate (MDR) on specified person-to-merchant UPI transactions above ₹2,000. The court’s decision was limited to refusing an interim stay; it did not determine whether the framework is lawful. The authorities’ responses are expected to address the basis for the charges. Under the announced framework, person-to-person transfers and person-to-merchant payments of ₹2,000 or less remain free. The 0.4% rate for qualifying merchant payments is capped at ₹300 for transactions of ₹75,000 and above. Specified essential sectors face a flat ₹5 charge on payments above ₹2,000, while certain securities-related payments carry a 0.02% rate, also capped at ₹300.