Archive · 26 Sep 2026
Small UPI MDR Reshapes Capital-Market Payment Economics
A new small fee will apply when people use UPI to send money to some investment businesses.
The fee is 0.02% of the payment and cannot exceed Rs 300.
It is meant to help pay for payment systems, security and fraud controls.
Investors should not see this as a separate charge at checkout.
Banks have been told not to let merchants pass the fee directly to customers.
The rule covers payments connected with mutual funds, brokers and other investment platforms.
Regular SIP payments through UPI AutoPay are reported to be excluded.
Brokers may ask customers to combine transfers or use other payment methods for large amounts.
The goal is to keep digital investing convenient while helping maintain the payment system.
Capital-market UPI payments will attract a 0.02% merchant discount rate, with a maximum charge of Rs 300.
The concessional rate covers eligible payments involving mutual funds, securities, stockbrokers, securities dealers and investment platforms.
UPI AutoPay mandates, including recurring SIP payments, are reported to remain outside the new MDR framework.
The MDR is intended as an intermediary-side cost, and banks have been advised to prevent merchants from passing it directly to investors.
Brokers may encourage consolidated transfers, recurring mandates or alternative bank-transfer channels to reduce repeated payment costs.
- Who
- Capital-market intermediaries, including mutual funds, stockbrokers, securities dealers and investment platforms, will be affected; investors use the payment routes.
- What
- A 0.02% MDR, capped at Rs 300, is being applied to eligible UPI capital-market payments.
- Where
- India’s Unified Payments Interface network.
- Why
- The rate is intended to support payment infrastructure, cybersecurity, fraud controls and service delivery without discouraging retail digital investing.
- New MDR
- 0.02% on eligible capital-market UPI payments.
- Maximum charge
- Rs 300; the article says this cap is reached at a Rs 15 lakh transfer.
- Covered payments
- Eligible payments involving mutual funds, securities, stockbrokers, securities dealers and investment platforms.
- Excluded payments
- UPI AutoPay mandates, including recurring systematic investment plan payments, are reported to remain outside the framework.
- Investor impact
- The MDR is intended to be an intermediary-side cost rather than a separate fee charged directly to investors.
- Potential platform response
- Intermediaries may promote consolidated transfers, recurring mandates or direct bank transfers to reduce repeated costs.
- Rate discrepancy
- The introduction describes a 0.04% baseline fee, while the body refers to a standard 0.4% UPI MDR.