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Business
Supreme Court to Hear Challenge to UPI MDR on Transactions Over Rs 2,000
✍️ Nagaland Post
🗓 28 Sep 2026, 06:02 PM
👁 11
The Supreme Court will consider a petition questioning the merchant discount rate applied to UPI payments exceeding Rs 2,000.
The Supreme Court of India is set to hear a petition today that seeks to overturn the merchant discount rate (MDR) imposed on Unified Payments Interface (UPI) transactions above Rs 2,000. The filing argues that the fee structure, introduced by the government and payment networks, unfairly burdens merchants and contradicts the principle of low‑cost digital payments.
The petitioners, representing a coalition of small retailers and industry bodies, contend that the MDR erodes profit margins for businesses that rely heavily on high‑value UPI transfers. They request the Court to direct the regulator to either reduce the rate or remove it altogether for transactions exceeding the Rs 2,000 threshold.
If the Court rules in favour of the petitioners, the decision could reshape the cost framework for digital payments across the country, potentially lowering transaction costs for merchants and influencing the pricing policies of banks and payment service providers.
The hearing comes amid broader debates on the sustainability of UPI’s fee‑free model and the government’s efforts to balance financial inclusion with revenue considerations for the payments ecosystem.
The petitioners, representing a coalition of small retailers and industry bodies, contend that the MDR erodes profit margins for businesses that rely heavily on high‑value UPI transfers. They request the Court to direct the regulator to either reduce the rate or remove it altogether for transactions exceeding the Rs 2,000 threshold.
If the Court rules in favour of the petitioners, the decision could reshape the cost framework for digital payments across the country, potentially lowering transaction costs for merchants and influencing the pricing policies of banks and payment service providers.
The hearing comes amid broader debates on the sustainability of UPI’s fee‑free model and the government’s efforts to balance financial inclusion with revenue considerations for the payments ecosystem.