India’s Unified Payments Interface has hit a new milestone — and a courtroom showdown to match — with the National Payments Corporation of India defending its merchant charges in the Supreme Court on November 5, 2026.
UPI hit a record in October, with average daily transaction value surpassing one trillion rupees for the first time, according to PaymentsJournal, even as transaction growth showed signs of slowing.
The Supreme Court affidavit
NPCI told the Supreme Court on November 5 that its Merchant Discount Rate applies to about 4 percent of person-to-merchant transactions above 2,000 rupees, shielding small QR merchants. The plea, by advocate Anjan Datta, challenges a 0.4 percent MDR on specified merchant deals above 2,000 rupees.
NPCI said merchants receiving up to 1 lakh rupees a month through UPI QR codes continue to enjoy zero MDR, and a fund financed by a 5 percent contribution from MDR collections is meant to promote UPI adoption among small merchants.
Street vendors push back
A study by the Indian School of Business, based on a survey of 722 street vendors across 14 states, found that while 67 percent of vendors accept UPI, only 52 percent had heard about the proposed MDR framework — and 45 to 53 percent said they would reduce UPI acceptance if the charges applied.
UPI handled 25.47 billion transactions in October 2026, according to the record report, though Reserve Bank of India figures cited elsewhere put the month at 23.83 billion, down from September. Either way, the system remains one of the largest real-time payment networks on earth — and the court case will decide what it costs the smallest sellers to use it.
The stakes are high because UPI is not a niche product: it is the payment system hundreds of millions of Indians use every day, from street vendors to large retailers. The Supreme Court case, filed by advocate Anjan Datta, will decide whether the MDR framework stands — and whether small merchants, who handle the vast majority of transactions, keep their exemption. With Diwali falling in November this year, the festive shopping season makes the timing even more sensitive for the vendors who rely on UPI the most.
