A lawyer has filed a Supreme Court petition challenging the Indian government's new Merchant Discount Rate (MDR) for UPI transactions over ₹2,000.
Reader brief
Through the Reader lens: A lawyer has filed a public interest litigation in the Supreme Court of India challenging the government's newly introduced 0.4% Merchant Discount Rate (MDR) on UPI transactions exceeding ₹2,000. This legal challenge targets a key policy shift intended to make the digital payments rail more sustainable for banks and payment aggregators after years of zero-fee mandates. The petition argues against the levy, potentially threatening the cost structure that has driven massive UPI adoption among Indian merchants and consumers. Indian media outlets are neutrally covering the filing, focusing on the procedural aspects of the Supreme Court case rather than taking strong editorial stances. The outcome will determine whether high-value UPI transactions will incur new costs, directly affecting merchant margins and consumer behavior. Observers are watching for the Court's initial hearing and any interim stay orders that could pause the MDR implementation.
What to watch next
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What was said4
Attributed, verbatim. Every quote is checked against the article it came from. One that does not match is not shown.
Anjan Datta
4 quotes“… impugned action bears directly upon the fundamental rights of an exceptionally large and largely unorganised class of citizens”
In the article
…litigation against the 2026 University Grants Commission (UGC) regulations and won a stay, filed a plea in the Supreme Court on Wednesday, seeking the quashing of the new merchant discount rate (MDR) framework. " … impugned action bears directly upon the fundamental rights of an exceptionally large and largely unorganised class of citizens ,” stated the 54-page writ petition seen by Mint. Datta, who also challenged the Place of Worship (Special Provisions) Act, 1991, argued that a change of this nature, affecting citizens at large, cannot be brought in…
“This selective and unequal withdrawal, and the consequential fixation of a detailed, multi-tiered financial levy through a press release rather than a notified statutory instrument, and without any legislatively prescribed guidelines, criteria, or Gazette publication governing the rates, caps, or sectoral classifications so fixed, is assailed herein as manifestly arbitrary, discriminatory, and violative of Articles 14 and 19(1)(g)”
In the article
…According to the petition, this makes the levy arbitrary and discriminatory, and violates the constitutional rights to equality under Article 14 and to carry on a profession or business under Article 19(1)(g). “ This selective and unequal withdrawal, and the consequential fixation of a detailed, multi-tiered financial levy through a press release rather than a notified statutory instrument, and without any legislatively prescribed guidelines, criteria, or Gazette publication governing the rates, caps, or sectoral classifications so fixed, is assailed herein as manifestly arbitrary, discriminatory, and violative of Articles 14 and 19(1)(g) ,” read the petition. In the plea, he said he was not challenging the government’s stated objective of maintaining and funding digital payments infrastructure. Rather, he questioned the legal route through which the new…
“the levy has been introduced without adequate statutory safeguards, transparency or public consultation.”
In the article
…interest litigation (PIL) matter has been filed in the Supreme Court, challenging the Centre's decision to impose a merchant discount rate (MDR) on specified UPI person-to-merchant transactions of above ₹2,000, saying the levy has been introduced without adequate statutory safeguards, transparency or public consultation. The government has introduced a 0.4 per cent fee on UPI payments of more than ₹2,000 made to merchants from October 15. Under this, a merchant discount rate (MDR) of 0.4 per cent is to be levied on person-to-merchant…
“the framework is arbitrary and discriminatory, and may adversely affect merchants, particularly those with low margins”
In the article
…the notification continues the no-charge protection for RuPay debit cards without a monetary ceiling. Also Read | 'This is false': Govt rejects 'foreign influence' charge in UPI merchant fee row The plea alleges that the framework is arbitrary and discriminatory, and may adversely affect merchants, particularly those with low margins , while also raising concerns over possible indirect consumer burden and digital exclusion. The petitioner has sought the quashing or suspension of the framework insofar as it imposes an MDR on UPI transactions of above…
Related coverage
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So what3
Who is affected first and what likely follows, with a direction and a horizon. Extracted from the reports, never invented.
- Indian merchants transaction cost uncertainty· weeks
- Banks and payment aggregators margin volatility· weeks
- UPI ecosystem regulatory uncertainty· weeks
Sources4
- [1]The HinducriticalPlea in Supreme Court challenges levy on UPI payments above ₹2,000
- [2]MintcriticalFirst legal challenge against UPI MDR filed in Supreme Court
- [3]Hindustan TimesneutralPetition in Supreme Court says scrap new UPI merchant fees; may burden consumers
- [4]Hindustan TimescriticalUPI MDR: Plea in SC challenges 0.4% fee on payments of above ₹2,000