Story perspectives

Supreme Court rejects stay on UPI merchant fee above INR2,000

By Drooid · Sep 30, 2026, 4:41 PM UTC · How we work

Left

Fee fuels black-money

The Supreme Court of India heard a public-interest litigation challenging the government’s proposed Merchant Discount Rate on UPI transactions above INR2,000 on 28 September 2026.
Petitioners warned the fee would burden consumers, facilitate black-money flows, and disproportionately harm ordinary people.
The plan sets a 0.4 % charge, capped at INR300 for payments of INR75,000 or more.
Railways and fuel, thin-margin sectors, would pay a flat INR5 per transaction above INR2,000.

Right

Court questions tax status

On 28 September 2026, India’s Supreme Court heard a public-interest case challenging the government’s merchant-discount rate on UPI payments above INR2,000.
The bench treated the fee as an administrative issue and asked whether it is a tax, fee or expropriation, rejecting executive authority to impose it.
Surya Kant, Joymalya Bagchi and V Mohana denied a stay and ordered affidavits within weeks.
Additional Solicitor General N Venkataraman said the MDR is a charge, 96 % exempt, essential INR5.

Center

Affidavit on policy

On 28 September 2026, India’s Supreme Court heard a public-interest case challenging the government’s proposed Merchant Discount Rate on UPI payments over INR2,000.
The bench refused to stay the fee and ordered Centre, RBI and NPCI to file an affidavit detailing policy basis.
The government said the MDR is a 0.4 % fee, capped at INR300 for transactions of INR75,000.
Essential services pay a flat INR5 per transaction above INR2,000, and 96 % of merchants are exempt.

Blindspot

Petitioners warned that the 0.4 % MDR on UPI payments above INR2,000 would burden ordinary consumers, could enable black-money transactions, and would charge thin-margin sectors such as railways and fuel a flat INR5 per transaction.
Within this story's sources, this angle appears mainly in Left-leaning coverage and receives less attention in Center- and Right-leaning coverage.

History

Historical Context

On 8 November 2016 the Indian government demonetised INR500 and INR1,000 notes, prompting a rise in digital payments and the RBI’s push for UPI. By 2022 UPI transactions surged, and the Supreme Court is hearing a 28 September 2026 case challenging the Finance Ministry’s 0.4 % merchant-discount rate on payments above INR2,000. The episode echoes earlier findings that 86 % of cash in circulation before demonetisation consisted of the withdrawn notes.

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Fee fuels black-money

The Supreme Court of India heard a public-interest litigation challenging the government’s proposed Merchant Discount Rate on UPI transactions above INR2,000 on 28 September 2026.
Petitioners warned the fee would burden consumers, facilitate black-money flows, and disproportionately harm ordinary people.
The plan sets a 0.4 % charge, capped at INR300 for payments of INR75,000 or more.
Railways and fuel, thin-margin sectors, would pay a flat INR5 per transaction above INR2,000.

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