NEW DELHI, India | September 29, 2026 — UPI MDR has reached the Supreme Court, but the reported refusal to grant an interim stay does not mean customers must start paying extra on every transaction. Reports of Monday’s hearing say the court sought responses to a challenge against charges on specified merchant payments. The government’s stated position places the charge within the merchant payment system, with an October 15 implementation date. The legal challenge remains unresolved.
INVC NEWS | BEYOND THE HEADLINE
What happened. Why it matters. What comes next.
THE 60-SECOND BRIEF
- Reports say the Supreme Court declined to pause the disputed framework.
- The case concerns specified person-to-merchant payments.
- The government says customers should not pay the MDR separately.
- Refusing interim relief does not settle the policy’s legality.
What Happened
According to reports of the September 28 hearing, a bench headed by Chief Justice Surya Kant sought responses from the authorities, including the Reserve Bank of India and the National Payments Corporation of India.
The court also asked the Centre to explain the policy’s basis on affidavit. Consequently, the proceedings will continue even though the court has not granted an immediate pause.
What the Reported Framework Covers
Reports describe a general MDR of 0.4% on eligible merchant payments exceeding ₹2,000, with a ₹300 ceiling.
However, the transaction amount alone does not establish liability. Merchant exemptions and separate sector arrangements also matter.
| Payment category | Position described in current reports |
|---|---|
| Transfers between individuals | Remain outside the merchant charge |
| Merchant payments up to ₹2,000 | Retain zero-MDR treatment |
| Eligible merchant payments above ₹2,000 | General rate of 0.4%, subject to exemptions |
| Higher-value eligible payments | ₹300 MDR ceiling |
| Implementation | Scheduled for October 15 |
Why It Matters
MDR represents a payment acceptance cost for a merchant. It differs from a separate charge that an app or shop asks a customer to pay.
For businesses, the practical question is whether their merchant category falls within the framework. A headline about the ₹2,000 threshold cannot answer that question for every shop.
Similarly, customers should not interpret the court development as an instruction to add 0.4% to their purchases.
What Each Side Says
The Centre reportedly described the arrangement as cost sharing among participants in the payments system. It also told the court that the government would not collect the money itself.
Meanwhile, the petition challenges the framework’s legal foundation, transparency and consultation process. It raises concerns about thin-margin businesses and the possibility that merchants could indirectly transfer costs to consumers.
Reports say the respondents have four weeks to submit their replies.
What Happens Next
The court will examine the parties’ submissions as the challenge proceeds. In the meantime, merchants should seek written clarification from their acquiring bank or payment provider about eligibility, exemptions and settlement treatment.
An interim decision answers whether the court will pause a measure at that stage. It does not amount to a final endorsement of every provision.
INVC NEWS Bottom Line
The reported court decision leaves the challenge open. It does not establish a blanket customer fee, and the reported implementation date remains October 15—not September 29.
