The 3‑judge bench of Chief Justice Surya Kant, Justices Joymalya Bagchi and V Mohana denied the Centre's plea to suspend the ₹0.4% fee on UPI merchant transactions over ₹2,000, a move that took effect on 15 October. It marked the end of nearly six years of free UPI payments, with the government arguing the charge would fund infrastructure resilience and fraud prevention.
The fee, which is capped at ₹300 for transactions of ₹75,000 or more, applies only to merchants; person‑to‑person transfers and smaller payments remain free. The Solicitor General, N Venkataraman, noted that 96% of UPI users fall under the exempt bracket, and the bench described the matter as more technical than legal.
Railways, telecom, insurance, fuel and agri‑input sectors will pay a flat ₹5 per transaction above ₹2,000, while joint‑venture securities and stockbrokers face a 0.02% MDR, also capped at ₹300. NPCI says the revenue will support cybersecurity, fraud prevention and innovation across the payment ecosystem.
The Supreme Court has asked the Centre, RBI and other agencies to file counter affidavits within four weeks. Once the affidavits are submitted, the Court will review the Centre’s justification before deciding whether to enforce the fee or issue a further stay.