NPCI to levy 0.02% MDR on UPI payments for mutual funds and stockbroking from Oct 2026
NPCI’s new framework will apply 0.02% MDR, capped at Rs 300 per transaction, to UPI payments made to mutual funds, brokers and investment platforms from October 15, 2026. Select merchant payments above Rs 2,000 will attract 0.4% MDR, while some utility categories will carry a Rs 5 flat fee.
What happened
National Payments Corporation of India (NPCI) · NPCI will charge 0.02% MDR, capped at Rs 300, on UPI payments to mutual funds, brokers and investment platforms
Key facts
- 0.02% MDR for capital-market UPI payments
- Rs 300 maximum charge per transaction
- 0.4% standard MDR for select P2M transactions above Rs 2,000
- Rs 5 flat MDR for railways, telecom, insurance, fuel and utilities above Rs 2,000
- Rs 50,000 transaction example incurs Rs 10 MDR
Why this matters
Payments, broking and wealth firms should assess partnerships or bundled settlement models that reduce MDR exposure while preserving UPI-led conversion as zero-cost acceptance ends for investment transactions.
What to watch
- NPCI operating circulars defining merchant categories, transaction eligibility, charge collection mechanics and treatment of mandates or recurring payments.
- SEBI, AMFI, stock-exchange and broker-association responses on investor fee pass-through and disclosure requirements.
- Payment-aggregator and acquiring-bank pricing announcements, especially any markup above the stated MDR.
- UPI payment-mix changes at brokerages and mutual-fund platforms after implementation, particularly migration to eNACH and netbanking.
- Consumer complaints or regulatory scrutiny if platforms introduce convenience fees for SIPs, mutual-fund purchases or trading-account funding.
- Further MDR expansion from investment categories to other currently subsidized merchant segments.
- Model MDR exposure by payment mix, ticket size, transaction frequency and whether the Rs 300 cap materially affects affluent or institutional-like retail flows.
- Prioritize eNACH, UPI AutoPay, netbanking and direct-bank-transfer journeys for SIPs and recurring brokerage funding before the October 15, 2026 start date.
- Negotiate acquiring and payment-aggregator pricing, including volume-linked rebates and merchant-category-code treatment for investment transactions.
- Test customer messaging and fee architecture: absorb fees for strategic segments, steer large lump sums to lower-cost rails, and avoid opaque retail surcharges.
- Monitor whether competitors use zero-fee UPI funding as a marketing subsidy, forcing broader industry absorption of the cost.