SC keeps UPI MDR rollout on track, seeks Centre, RBI and NPCI responses
The Supreme Court declined to stay the October 15 rollout of UPI merchant discount rates, seeking responses from the Centre, RBI and NPCI within four weeks. The proposed 0.4% MDR applies to specified transactions above Rs 2,000, with roughly 96% of transactions expected to remain unaffected.
The development
Supreme Court kept the October 15 UPI MDR rollout in force, seeking responses from the Centre, RBI and NPCI within four weeks. The framework applies 0.4% MDR above Rs 2,000 for specified merchant transactions, while approximately 96% remain unaffected.
The numbers
- October 15
- Rs 2,000
- four weeks
- 0.4%
- 96%
Why it matters to operators and investors
Prepare for a 0.4% UPI MDR on eligible transactions above Rs 2,000 from October 15, while assessing pricing, checkout and payment-mix impacts because the Supreme Court has not yet ruled on the challenge.
What to watch next
- Supreme Court hearing schedule, interim directions and the content of Centre, RBI and NPCI affidavits.
- Final notification details: covered merchant categories, transaction definition, threshold treatment, effective date, tax treatment and exemptions.
- NPCI or bank guidance on merchant onboarding, routing, surcharge restrictions, dispute handling and refund treatment.
- Large retailer, e-commerce platform and payment-gateway announcements on absorbing, passing through or offsetting MDR.
- Changes in high-value UPI volume share, card/EMI usage, bank-transfer adoption and merchant payment-mode steering after rollout.
The counter-case
The headline may overstate the near-term earnings impact: if 96% of UPI transactions are exempt, the affected transaction count could be too small to materially change most retailers’ payment costs. Larger chains may absorb the fee, steer customers to alternative payment methods, renegotiate acquiring terms, or pass part of the cost through pricing. The court’s request for responses also leaves material policy and implementation uncertainty, so the October 15 framework could still be modified, narrowed, delayed, or reversed.