UPI MDR of 0.02% could pressure India’s ₹0-brokerage business model.
Investors face limited direct costs, with ₹1 lakh attracting ₹20 MDR.
Frequent fund transfers and quarterly settlements could increase brokers’ payment costs.
Starting October 15, selected UPI payments above ₹2,000 will attract a Merchant Discount Rate (MDR), but the change does not mean every UPI transaction above that threshold will suddenly become chargeable.
The rules create separate treatment for recurring payments through UPI AutoPay and mandates, while transactions linked to mutual funds and other capital-market activities will fall under a lower MDR structure.
For investors, the immediate impact may appear negligible. The Merchant Discount Rate for capital-market transactions, including payments towards mutual funds, securities, stockbrokers and dealers, has been set at 0.02% of the transaction value, capped at ₹300 per transaction.
