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Plea in Supreme Court challenges 0.4% merchant discount rate on UPI payments above Rs 2,000
2 updates, 16 September 2026 to 17 September 2026.
- 16 September 2026:
NPCI sets 0.4% merchant discount rate on UPI payments above Rs 2,000 from October 15
The National Payments Corporation of India announced that a merchant discount rate (MDR) of 0.4 percent will apply to person to merchant UPI transactions above Rs 2,000, effective from 15 October 2026. UPI transactions up to Rs 2,000 will continue to remain free of charge. The MDR is not a tax and does not accrue to the government: the fee is distributed among banks, payment aggregators and other participants in the UPI payments chain. A committee of banks had been examining the structure of merchant charges on larger UPI transactions before the NPCI notification.
- 17 September 2026:
Plea in Supreme Court challenges 0.4% merchant discount rate on UPI payments above Rs 2,000
A plea has been filed in the Supreme Court challenging the Centre's 14 September 2026 notification permitting a merchant discount rate of 0.4 percent on UPI person to merchant transactions above Rs 2,000, effective from 15 October. The petition, filed by advocate Anjan Datta, contends that the levy amounts to an unauthorised charge on a public digital payments system. UPI transactions up to Rs 2,000 and all person to person transfers remain free of the charge, and small merchants receiving up to Rs 1 lakh a month through UPI QR codes are exempted from it.