The Supreme Court on September 28 refused to grant an interim stay on the 0.4% fee for UPI person-to-merchant payments above ₹2,000, a major blow to the petitioners challenging the levy.

A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana issued notices to the Centre, the Reserve Bank of India and the National Payments Corporation of India, asking for affidavits within four weeks.

The fee framework takes effect on October 15, 2026. The merchant discount rate is capped at ₹300 per transaction, with a flat ₹5 fee for railways, telecom, insurance and fuel payments above ₹2,000. Person-to-person transfers remain completely free.

The PIL was filed by advocate Anjan Datta, who argued the fee would hurt small merchants and digital payment adoption.

Appearing for the government, Additional Solicitor General Venkataraman said 96% of gateway transactions are exempt from the fee.

The Finance Ministry notified the framework in the official gazette on September 14, ending nearly six years of fully free UPI payments for merchants.

UPI processed about 24.51 billion transactions in August 2026 worth nearly ₹29.82 lakh crore.