The plea in the Supreme Court challenges the charge on UPI payments above ₹2,000

The suit was filed by advocate Anjan Datta challenging the Centre’s September 14 notification and the MDR framework. | Photo credit: The Hindu

A petition has been filed in the Supreme Court challenging the government’s decision to charge merchants a fee of 0.4% for specific UPI merchant transactions exceeding ₹2,000. The National Payments Corporation of India (NPCI) has introduced a merchant discount rate (MDR) of 0.4% on UPI payments effective October 15.

The petition was filed by advocate Anjan Datta challenging the Centre’s September 14 notification and the MDR framework announced on September 15.

According to the government, an MDR of 0.4% would be imposed on merchant-to-person (P2M) UPI transactions above ₹2,000. For transactions of ₹75,000 and above, the MDR will be capped at ₹300 per transaction.

The cause of action challenged the constitutional validity of the amended Section 10A of the Payment and Settlement Systems Act of 2007, arguing that it granted unbridled powers to the executive branch to decide which electronic payment schemes would receive toll-free protection. In this context, the petitioner pointed out that the free protection of RuPay debit cards will continue even without the monetary cap.

The plea further questioned why rate fixations, transaction thresholds, etc. were introduced through a press release. The petition alleged that the full operative instrument prescribing these charges was not published in the Official Gazette.

He sought wider and transparent consultation on the MDR framework, along with the publication of empirical data and impact assessments. The petition also called for guarantees for micro and small businesses.

Published – 16 Sep 2026 19:10 IST