Archive · 16 Sep 2026
UPI MDR Proposal Raises Costs for Digital Investment Platforms
A new proposal could add a small fee to some UPI payments used for investing.
The proposed fee is 0.02% of a transaction, with a maximum of ₹300.
Even a tiny fee can become expensive when millions or crores of rupees move every day.
For example, a platform handling ₹200 crore daily could pay about ₹4 lakh each day.
Over a year, that could add up to ₹11.52 crore.
This money might reduce the platform’s profits.
Some platforms could decide to charge their customers instead.
INDmoney says it will not pass this proposed cost to its investors.
It is still unclear how the fee would be divided among payment and market infrastructure providers.
A proposal would apply a 0.02% Merchant Discount Rate to capital-market transactions made through UPI, capped at ₹300.
For a platform processing ₹200 crore in daily UPI wallet recharges, the proposed charge would equal ₹4 lakh per day.
Using 24 trading days per month, the estimated annual cost would reach ₹11.52 crore.
INDmoney founder Ashish Kashyap said the charge could directly reduce digital brokerages’ profits.
Kashyap said INDmoney would not pass the proposed cost on to its investors, although the wider fee-sharing mechanism remains unresolved.
- Who
- Digital investment platforms, retail investors, market infrastructure providers, payment gateways, and clearing houses; Ashish Kashyap specifically commented on behalf of INDmoney.
- What
- A proposal to apply a 0.02% MDR to capital-market transactions through UPI, capped at ₹300.
- Where
- On digital investment platforms using UPI for stock, derivatives, and mutual-fund transactions.
Absorb the Cost
Pass the Cost On
Who pays the MDR?
Absorb the Cost
INDmoney founder Ashish Kashyap said his platform would absorb the proposed charge and not impose it on investors.
Pass the Cost On
The proposal could encourage some digital brokers to introduce a convenience fee or otherwise pass the cost to customers.
Effect on platforms
Absorb the Cost
Platforms that absorb the charge could face a significant reduction in profits, with the example in the article producing an annual cost of ₹11.52 crore.
Pass the Cost On
Platforms may seek to protect their bottom lines by transferring some or all of the charge to users, although the article does not say that all platforms will do so.
Fee distribution
Absorb the Cost
The cost could be absorbed by platforms or distributed among payment and market-infrastructure participants.
Pass the Cost On
The final allocation remains unsettled, particularly where mutual-fund transactions use infrastructure such as BSE StAR MF.
- Proposed MDR
- 0.02%, capped at ₹300 per transaction
- Example daily processing
- ₹200 crore in UPI wallet recharges and investment transactions
- Estimated daily cost
- ₹4 lakh at the proposed rate
- Estimated annual cost
- ₹11.52 crore, based on 24 trading days per month
- INDmoney position
- The company says it will not pass the cost to investors
- Affected activities
- Stock trading, F&O derivatives, and mutual-fund investments
- Unresolved issue
- How the fee would be shared among platforms, payment gateways, clearing houses, and intermediaries