₹2,000+ UPI payment charges: SC refuses interim stay on 0.4% MDR, issues notice to govt, RBI, NPCI and others
The Supreme Court has declined to grant an interim stay on the government’s new merchant discount rate (MDR) policy, which imposes a 0.4% charge on specific Unified Payments Interface (UPI) transactions exceeding ₹2,000. This decision comes despite a public interest litigation challenging the legality of this levy. Notices have been issued to the government, the Reserve Bank of India, the National Payments Corporation of India (NPCI), which operates the UPI network, and other involved financial organizations. For now, the new policy remains in effect.
What this means
The Supreme Court's refusal to grant an interim stay means the 0.4% MDR on UPI transactions above ₹2,000 remains in force. This will continue to impact merchants and consumers, potentially shifting payment behaviours for higher-value transactions. Banks that act as acquirers for UPI transactions will continue to earn revenue from this MDR, though the long-term impact on UPI adoption rates for larger payments bears watching. It signals a cautious approach from the judiciary on payment policy interventions.
Most affected: Digital Payments, Merchants, Acquiring Banks
Key takeaway: Monitor the ongoing legal challenge and market response to the UPI MDR, assessing its long-term effect on digital payment preferences and merchant adoption.
Get stories like this in your inbox every morning
Free daily brief — rates, RBI updates and the banking stories that matter, in 3 minutes.