The Supreme Court on Monday refused to grant an interim stay on the decision taken by India government to impose a Merchant Discount Rate (MDR) on specified UPI Person-to-Merchant (P2M) transactions totaling above Rs 2,000.
The apex court also sought responses from the union government and others on a Public Interest Litigation (PLI) challenging the decision.
A bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana agreed to hear the plea and directed the union government, the Reserve Bank of India (RBI) and others to file their counter affidavits within four weeks.
"It is less a legal and more a technical issue," the bench observed.
Additional Solicitor General N Venkataraman, appearing for the union government, told the bench that 96 per cent of people using the gateway were exempt.
After the top court issued notice and directed the respondents to file their counter affidavits within four weeks, the counsel appearing for the petitioner requested the bench, "Please stay it till then."
The PIL was filed by advocate Anjan Datta.
The union government, on September 15, set a 0.4 per cent fee from October 15 on UPI P2M payments above Rs 2,000 and capped the fee at Rs 300 for payments of Rs 75,000 and above.
The move ended the Zero MDR regime that has been in place since January 2020, introduced to drive digital payments adoption but long criticised by financial institutions as unsustainable.
Essential and thin-margin sectors -- railways, telecom, insurance, fuel and agricultural inputs -- will pay a flat MDR of Rs 5 per transaction above Rs 2,000.
Payments into mutual funds, securities and through stockbrokers and dealers will attract 0.02 per cent MDR, also capped at Rs 300.
Person-to-Person (P2P) transfers -- which make up 37 per cent of UPI's transaction volume and 70 per cent of its transaction value -- will continue to attract zero charges, irrespective of size.