New Delhi, Sept. 17: A public interest litigation has been filed in the Supreme Court challenging MDR on UPI payments above Rs 2,000.
Advocate Anjan Datta filed the plea against the Centre’s September 14 notification and September 15 framework.
The framework proposes a 0.4 per cent merchant discount rate on specified UPI person to merchant transactions above Rs 2,000.
It is scheduled to take effect from October 15.
UPI transactions up to Rs 2,000 will remain outside the proposed MDR. Person to person UPI transfers will also remain free.
The petitioner has challenged the constitutional validity of amended Section 10A of the Payment and Settlement Systems Act, 2007.
UPI MDR Plea Questions Rates and Exemptions
According to the plea, general P2M transactions above Rs 2,000 will attract 0.4 per cent MDR.
The charge will have a maximum cap of Rs 300 for transactions of Rs 75,000 and above.
The framework also proposes a flat Rs 5 MDR for certain essential and thin margin sectors.
These include railways, telecommunications, insurance, fuel and agricultural inputs.
Capital market transactions will attract an MDR of 0.02 per cent, capped at Rs 300.
The petitioner has also pointed to exemptions for small merchants receiving up to Rs 1 lakh monthly through UPI QR codes.
The plea alleges that the framework gives the executive broad powers to decide which payment modes receive no charge protection.
It also questions the rates, transaction limits, caps and sector classifications.
The petitioner has alleged that the complete operative instrument prescribing the charges was not published in the Official Gazette.
The plea further questions the different treatment of UPI and RuPay debit card payments.
It alleges that the framework could affect low margin merchants and increase indirect costs for consumers.
The petitioner has sought quashing or suspension of the MDR framework for UPI payments above Rs 2,000.
Alternatively, the plea seeks reconsideration after public consultation and publication of relevant data.
It also seeks an impact assessment and safeguards for micro and small enterprises.
The petitioner has further sought an independent review by the Reserve Bank of India and the Union government.
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