SC issues notice to Centre on plea challenging UPI MDR:Top court refuses to stay Centre’s decision to impose UPI fees on transactions above ₹2,000

The Supreme Court on Monday, 28 September, 2026, issued notice to the Centre over a public interest litigation filed earlier challenging the Centre’s decision to levy 0.4% charges on UPI payments worth above ₹2,000 in the case of P2M transactions. The top court has also sought responses of RBI NPCI over this matter. The top court has directed the government and others to file their counter affidavit within four weeks. Aditionally, the apex court has also refused to stay the Centre’s decision to impose MDR on specified UPI person-to-merchant transactions of over ₹2,000 from 15 October. A bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana also noted that the issue is less legal and more technical. Additional Solicitor General N Venkataraman, appearing for the Centre, told the bench that 96% of people using the gateway were exempt. After the top court issued notice and directed the respondents to file their counter affidavits within four weeks, the counsel appearing for the petitioner requested the bench, “Please stay it till then,” according to PTI.
The bench refused to grant any interim stay. The public interest litigation (PIL) was filed by advocate Anjan Datta. As of now, the UPI MDR would come into effect from 15 October. Ending nearly six years of fully free UPI payments, the government has introduced a 0.4% fee on transfers worth over ₹2,000 made to merchants through the UPI platform from 15 October while explicitly ring-fencing everyday person-to-person transactions and small payments from any charge.
The MDR will be capped at ₹300 for payments of ₹75,000 and above.
Essential and thin-margin sectors — railways, telecom, insurance, fuel and agricultural inputs — will pay a flat MDR of ₹5 per transaction above ₹2,000.
Payments into mutual funds, securities and through stockbrokers and dealers will attract 0.02 per cent MDR, also capped at ₹300.
Person-to-person (P2P) transfers — which make up 37% of UPI’s transaction volume and 70% of its transaction value — will continue to attract zero charges, irrespective of size.