Supreme Court Refuses Stay on Centre's UPI Transaction Fee Decision

The Supreme Court has refused to grant an interim stay on the Centre's decision to introduce a Merchant Discount Rate (MDR) on specified UPI transactions above Rs 2,000.

According to Anandabazar's report, the court on Monday rejected the plea seeking an interim stay on the new UPI fee framework. It also issued notices to the Centre, the Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI) and other respondents.

Under the new framework, a 0.4% MDR will apply to specified person-to-merchant (P2M) UPI transactions above Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 or more.

A flat MDR of Rs 5 will apply to transactions above Rs 2,000 in specified sectors including railways, telecom, insurance and fuel. Person-to-person (P2P) UPI transfers are not covered by the new charge.

The Supreme Court has asked the Centre to explain through an affidavit the basis and legal character of the new charge. The government told the court that around 96% of UPI transactions would remain outside the new fee framework.

The new MDR framework is scheduled to come into effect from October 15.

Source: Anandabazar Patrika. Report dated September 28, 2026.