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Sebi weighs UPI merchant fee concerns raised by stockbrokers
Sebi said capital markets will see a 0.4% UPI merchant discount rate above ₹2,000, while a 0.02% reduced MDR would apply to capital-market transactions from 15 October.
Indian stockbrokers have urged India’s Union government to address concerns about a merchant discount rate tied to Unified Payments Interface transactions that can affect brokers’ economics, according to LiveMint Markets.
Securities and Exchange Board of India chair Tuhin Kanta Pandey said at a press conference after the regulator’s board meeting on Thursday that capital markets face different challenges than standard merchants, and that Sebi has already gathered feedback to evaluate regulatory solutions.
The National Payments Corporation of India announced that merchant discount rate charges for certain UPI transactions start on 15 October. Under the framework, person-to-merchant UPI payments above ₹2,000 carry a 0.4% fee, and for transfers of ₹75,000 or more the MDR is capped at ₹300 per transaction.
Sebi also said the ₹300 cap would not apply to capital-market transactions in the same way, with securities, mutual funds, and brokers set to face a reduced MDR of 0.02%. The story notes brokers are required to display and use valid UPI handles for transfers to verified accounts, and that clients sometimes deposit cash into trading accounts without placing trades, which can leave brokers absorbing UPI processing costs, with additional charges recurring as unutilized funds are returned and then re-deposited under Sebi’s quarterly settlement mandate.