The National Payments Corporation of India told the Supreme Court that zero Merchant Discount Rate for all transactions is no longer sustainable.
The National Payments Corporation of India (NPCI) told the Supreme Court that a zero Merchant Discount Rate (MDR) for all Unified Payments Interface (UPI) transactions is no longer sustainable, according to The Hindu and BusinessLine.
Represented by Additional Solicitor General N. Venkataraman, the NPCI submitted that functional costs for the expanding digital payment industry would otherwise burden the public exchequer.
The corporation is responding to a court challenge regarding the government's decision to introduce a 0.4 per cent MDR on Person-to-Merchant (P2M) UPI transactions above ₹2,000.
The NPCI stated that P2P transactions, which account for 70 per cent of total UPI transaction value, will remain free regardless of the amount.
The new charge will apply to only about 4 per cent of merchant transactions, while approximately 96 per cent of all P2M transactions will remain unaffected.
In August 2026, UPI processed 24.51 billion transactions worth approximately ₹29.82 lakh crore, marking its highest monthly volume with an average of 791 million daily transactions.
