India's new Unified Payments Interface merchant-fee framework drew a public-interest petition in the Supreme Court and objections from retail and brokerage groups on 16 September. The petition seeks suspension of the framework, alleging inadequate statutory authority, transparency and safeguards. The court had not ruled on the filing at the time of reporting.
The challenge followed the National Payments Corporation of India's decision to impose a 0.4% merchant discount rate on qualifying payments above ₹2,000 from 15 October. Person-to-person transfers and smaller merchant payments remain outside the charge. Government sources told the Press Trust of India that no reversal was under consideration.
RETAIL AND BROKING OBJECTIONS
The Retailers Association of India warned that the cost could encourage some merchants to prefer cash as festival spending rises in October and November. The group said many seasonal purchases exceed the threshold and that thin-margin retailers would have to absorb the charge. The Clothing Manufacturers Association of India also criticised the timing amid efforts to revive demand and margins.
Capital-market payments to stockbrokers, mutual funds and securities dealers face a separate 0.02% fee capped at ₹300. Zerodha chief executive Nithin Kamath said that structure would add costs even when customers transfer money without subsequently trading. His comments focused attention on the operating economics of low-cost brokerage platforms.
IMPLEMENTATION REMAINS SCHEDULED
The Finance Ministry said customers would continue to pay no UPI charge and merchants would bear the discount rate. It said more than 95% of merchant transactions fall below ₹2,000. Vendors receiving up to ₹100,000 a month through UPI QR codes would also retain zero-fee treatment under the framework.
The immediate legal milestone is whether the Supreme Court takes up the petition or issues interim directions. Unless the framework is changed or suspended, the new fees remain scheduled to begin on 15 October. Retailer payment preferences and merchant acceptance during the festival period will provide the first practical test of the policy's effects.