SEBI to review brokers’ concerns over UPI MDR on payments above ₹2,000
SEBI will examine stockbrokers’ objections to a proposed 0.02% MDR plus GST on UPI transactions above ₹2,000 from October 15. Brokers say the levy could increase costs on client fund transfers that do not result in trades, while the policy could also reshape UPI acceptance economics for merchants.
What happened
SEBI will examine stockbrokers' concerns over MDR on UPI payments above Rs 2,000, after brokers said the charge could raise costs when client fund transfers do
Key facts
- MDR applies to UPI payments above Rs 2,000 from October 15
- 0.02% MDR plus GST cited for UPI transactions above Rs 2,000
- NSE IPO offer for sale: Rs 22,562 crore
Why this matters
Payments platforms and acquirers should evaluate partnerships or acquisitions that strengthen merchant routing, cost optimization, and alternative-payment capabilities if UPI pricing becomes less uniformly free.
What to watch
- SEBI consultation outcome, circular or formal communication before the October 15 implementation date.
- Whether the MDR applies only to specified broker/payment categories or broadly to UPI transactions above ₹2,000.
- Treatment of GST, refunds, failed transactions, reversals, client withdrawals and non-trade-linked fund transfers.
- NPCI, RBI or finance ministry clarification on UPI MDR funding, interchange and merchant discount policy.
- Broker announcements of revised payment rails, top-up limits or customer charges.
- Evidence that other high-frequency digital-payment sectors seek similar exemptions.
- Brokers will quantify MDR leakage from client deposits, withdrawals, margin top-ups and unsuccessful payment flows, then submit data-backed representations to SEBI and payment regulators.
- Trading platforms may steer larger account-funding transactions toward net banking, IMPS/NEFT/RTGS, auto-pay mandates or pooled settlement mechanisms.
- Brokers with high UPI usage may introduce minimum top-up sizes, fewer free funding attempts or selective pass-through fees if no exemption emerges.
- Merchants and payment aggregators will seek clarity on whether the proposed threshold signals a broader return of UPI MDR for commercial use cases.
- Banks, PSPs and UPI apps may prioritize routing, reconciliation and merchant-category controls needed to identify chargeable transactions.