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Brokerages consider new fees as UPI MDR framework takes effect
The MDR framework begins 15 October and adds a 0.02% charge on UPI capital-market payments, capped at ₹300 per transaction, pressuring broker margins.
Indian stock brokerages are weighing new charges, including mandate-based payments, additional transaction fees, and cuts to free offerings, to offset the impact of a new merchant discount rate framework for UPI transactions, according to people familiar with the matter cited by LiveMint Markets.
The merchant discount rate framework takes effect from 15 October and applies a 0.02% charge on UPI transactions for capital-market payments, with a cap of ₹300 per transaction, a structure that threatens to squeeze already-thin broker margins.
LiveMint Markets also notes that the National Payments Corporation of India has said UPI charges should not be passed on to consumers, leaving brokerages to look for other ways to protect revenue as the MDR rules roll out.
In addition, the source describes that UPI transaction failures can occur due to business declines, such as an invalid PIN or incorrect beneficiary account, or technical declines, where a transaction is declined for technical reasons.