Discount brokers seek 2-bps UPI MDR cap for capital-market payments
Groww, Zerodha, Angel One and Upstox have urged SEBI to limit UPI merchant discount rates on capital-market transactions to about 2 basis points, with a ₹2-5 absolute cap. They also seek a higher zero-MDR threshold of ₹20,000, arguing the proposed framework could raise costs for investor fund additions and payouts.
What happened
Groww · Indian discount brokers have urged SEBI to cap UPI MDR on capital-market payments at about 2 basis points and raise the zero-MDR threshold to ₹20,000,
Key facts
- MDR proposed at around 2 basis points
- Absolute fee cap of ₹2-5
- Existing proposed cap of ₹300
- MDR-free threshold requested at ₹20,000 versus ₹2,000
- Nearly 95% of lumpsum payments are UPI-driven
What changed
Indian discount brokers have urged SEBI to cap UPI MDR on capital-market payments at about 2 basis points and raise the zero-MDR threshold to ₹20,000, citing high UPI usage and potential costs on customer fund additions and payouts.
Why this matters
Brokerage operators face a potential cost increase on UPI-led investor fund flows and are pushing for a 2-bps MDR cap, a ₹2-5 transaction ceiling and a higher ₹20,000 zero-MDR threshold to protect unit economics.
What to watch
- SEBI consultation language specifying whether fund additions, payouts, IPO applications and secondary-market settlements are covered separately.
- NPCI or RBI guidance on MDR, interchange, subsidy support and merchant-category treatment for capital-market transactions.
- Final zero-MDR threshold and whether an absolute rupee cap is included.
- Broker disclosures of UPI transaction mix, average funding ticket size and payment-processing expense.
- Evidence of customer migration from instant UPI top-ups to netbanking or mandate-based rails.