The Supreme Court has refused to stay the proposed merchant discount rate (MDR) on UPI transactions above Rs 2,000. The court will hear the case in detail before taking a final call.

The judges sought responses from the government and other parties within four weeks. The proposed MDR framework is set to start on 15 October 2026.

The plea argued that the charges on merchants amount to an unfair levy on digital payments. The court asked the government to explain the legal basis for the charge.

According to the Hindu BusinessLine, the court did not grant any interim relief to the petitioners. Small merchants have raised concerns about the added cost.

The outcome will affect crores of UPI users and lakhs of shopkeepers. The next hearing will decide whether the October rollout can proceed. UPI has grown into the country’s main digital payment system, with crores of transactions every day. Any new charge could change how small shops accept payments.