The Supreme Court faces a PIL challenging the 0.4% MDR on UPI payments above ₹2,000. This levy, effective October 15, was introduced without public consultation or clear statutory safeguards. For many small and mid-sized merchants, this means unexpected costs on a once-free platform.
How We Got Here
The Centre announced a new MDR framework on September 15, following a September 14 notification. This framework, effective October 15, mandates a 0.4% charge on P2M UPI transactions exceeding ₹2,000.
The Numbers
- The framework caps the 0.4% general P2M MDR at ₹300 for transactions above ₹75,000.
- Specific sectors like railways and fuel have a flat ₹5 MDR on transactions over ₹2,000.
- Exemptions include all P2P transfers and small merchants collecting up to ₹1 lakh monthly via UPI QR codes.
- The PIL questions the constitutional validity of Section 10A of the Payment and Settlement Systems Act, 2007.
- It also highlights the continued no-charge protection for RuPay debit cards, unlike UPI.
What Happens Next
🇮🇳 Why This Matters for India
For retail merchants in cities like Nashik and Kochi, this new MDR adds direct costs, squeezing already thin margins on digital payments.
The Take
This PIL cuts to the core of UPI's public good image. Imposing a fee without consultation risks undermining merchant trust and could stall deeper digital penetration in segments where cash still dominates for high-value transactions.
Source:
YourStory ↗