NPCI filed a counter-affidavit in the Supreme Court of India on November 3, 2026 defending the merchant discount rate it has set for select UPI person-to-merchant payments. The affidavit responds to a petition challenging the amendment to Section 10A of the Payment and Settlement Systems Act, 2007. NPCI told the court that a charge of up to 0.4 percent applies only to person-to-merchant payments above Rs 2,000.
NPCI said merchants are barred from passing the charge on to customers. The affidavit describes that prohibition as binding rather than a policy assurance. A payer bank or UPI app that violated the directive would breach its service-level agreements with NPCI, which require compliance with all NPCI circulars, and could face compliance action or termination of its UPI membership. NPCI also told the court that UPI app providers are not permitted to levy platform fees or additional charges on UPI payments.
NPCI put the share of person-to-merchant transactions unaffected by the framework at 96 percent. It told the court that the 0.4 percent ceiling is lower than the charges other payment systems impose on credit and debit card transactions. NPCI deferred the rollout, originally scheduled for October 15, until after Diwali. The new implementation date will be notified separately. No start date for the framework is in force as a result.