UPI Charges Above ₹2,000: Supreme Court Refuses Stay
The Supreme Court has refused to stay the new UPI charges above ₹2,000 for certain merchant payments. The court has also asked the Centre, Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) to respond to a petition against the new Merchant Discount Rate (MDR).
The new framework is set to take effect from October 15, 2026. However, the proposed charge will apply to specific person-to-merchant (P2M) transactions. It will not mean a direct fee on every UPI payment.
What Are The UPI Charges Above ₹2,000?
Under the new framework, a 0.4% MDR will apply to certain merchant UPI payments above ₹2,000. MDR is a fee linked to processing a digital payment. Merchants, rather than customers, will bear this charge under the proposed system.
The government has also said that many UPI transactions will remain outside the charge. According to the Centre’s submission, around 96% of gateway users will remain exempt under the framework.
Why Did The Supreme Court Refuse A Stay?
The Supreme Court heard a petition challenging the new MDR framework. The petition questions the legal basis for introducing the charge on selected UPI transactions.
During the hearing, the court sought responses from the Centre, RBI and NPCI. The respondents have been given four weeks to file their replies. However, the court did not stop the proposed October 15 implementation.
Will UPI Users Have To Pay?
For now, the proposed UPI charges above ₹2,000 are not a direct customer fee. The MDR will apply to eligible merchant transactions, while customers will not directly pay the charge.
The government has also maintained that consumers will not bear the MDR. The Supreme Court will consider the legal challenge after receiving responses from the concerned authorities.
Therefore, UPI users can continue making regular payments. The October 15 framework will determine how eligible merchant transactions above ₹2,000 are processed.
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