Supreme Court seeks Centre, RBI response on UPI MDR challenge
The Supreme Court has sought responses within four weeks on a petition challenging the 0.4% MDR imposed on specified UPI merchant payments above Rs 2,000. The court declined to stay the fee introduced on October 15.
The development
The Supreme Court sought responses within four weeks on a petition challenging MDR on specified UPI merchant payments above Rs 2,000. The court declined an interim stay on the Centre's 0.4% fee, introduced from October 15.
The numbers
- Rs 2,000
- four weeks
- 96 per cent
- six years
- 0.4%
- October 15
- Rs 300
- Rs 75,000
- Rs 5
- 0.02%
- 37%
- 70%
Why it matters to operators and investors
Payments and retail platforms should assess scenarios for a revised UPI MDR regime, including merchant-pricing, acquiring economics, and partnership terms for higher-value transactions.
The counter-case
The immediate retail impact may be limited: the reported 0.4% MDR applies only to specified merchant UPI payments above Rs 2,000, not the full UPI transaction base. The Supreme Court did not stay the fee, and a request for government and RBI responses is procedural rather than evidence that the policy will be struck down. Even if the framework changes, banks, PSPs, acquirers, or merchants could absorb or reallocate the cost differently, muting any direct effect on retailer margins or UPI acceptance.