PIL in SC challenges 0.4% MDR on UPI transactions above ₹2,000 in India

Petitioner questions the amended payment law, lack of gazette publication and differing treatment of UPI and RuPay debit-card transactions under the new framework

A public interest litigation (PIL) has been filed in the Supreme Court challenging the Centre’s recently introduced framework for levying a merchant discount rate (MDR) on certain UPI transactions exceeding Rs 2,000.

The petition, filed by advocate Anjan Datta, seeks to invalidate or suspend the framework, which is scheduled to take effect on October 15. It challenges the Centre’s September 14 notification as well as the framework announced on September 15.

Under the new regime, an MDR of 0.4 per cent will apply to general person-to-merchant (P2M) UPI transactions above Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 or more.

Certain sectors classified as essential or operating on thin margins will instead attract a flat MDR of Rs 5 on transactions above Rs 2,000. These include railways, telecommunications, insurance, fuel and agricultural inputs. Capital-market transactions will carry an MDR of 0.02 per cent, subject to a ceiling of Rs 300.

The plea challenges the constitutional validity of the amended Section 10A of the Payment and Settlement Systems Act, 2007.