UPI MDR framework to add capped fees on one-time stock and mutual fund payments from Oct 15
India’s new UPI MDR rules exempt UPI AutoPay SIPs and keep P2P and merchant payments up to ₹2,000 free. Eligible one-time capital-market payments will attract a 0.02% MDR, capped at ₹300, borne by merchants and intermediaries; brokerages may absorb or pass on costs tied to trading-account funding.
What happened
India’s new UPI MDR framework exempts UPI AutoPay SIPs and applies a 0.02% capped fee to eligible one-time capital-market payments. Merchants and intermediaries
Key facts
- Effective October 15, 2026
- 0.4% MDR for eligible P2M UPI transactions above ₹2,000, capped at ₹300
- 0.02% MDR for capital-market UPI transactions, capped at ₹300
- ₹5,000 mutual fund purchase: ₹1 MDR
- ₹50,000 stock purchase: ₹10 MDR
- UPI P2P transfers and P2M transactions up to ₹2,000 remain free
Why this matters
Prioritize partners with low-cost funding rails and clear MDR-sharing models, as the change could favor platforms that steer investors toward AutoPay or alternative payment methods.
What to watch
- Final NPCI, RBI, and banking-partner clarification on which merchant category codes and capital-market flows qualify for the MDR.
- Whether major discount brokers publicly absorb the charge, set a minimum transaction fee, or pass through the full MDR.
- Changes in UPI share of brokerage-account funding versus net banking, IMPS, and NEFT after Oct 15.
- Any rise in UPI AutoPay SIP adoption as platforms steer investors toward exempt recurring mandates.
- Competitive responses from leading brokers and mutual-fund apps, especially zero-fee positioning around account funding.
- Evidence that banks or payment providers add additional processing charges beyond the stated 0.02% capped MDR.
- Brokerages will review whether UPI top-up fees can be absorbed within existing acquisition budgets or require customer pass-through.
- Trading and investment apps will promote bank-transfer alternatives for larger deposits while preserving UPI for low-value or urgent funding.
- Payment aggregators and UPI PSPs will update merchant-category tagging, settlement systems, and MDR disclosures before Oct 15.
- Mutual-fund and wealth platforms will emphasize exempt UPI AutoPay SIPs in marketing, reinforcing recurring-investment behavior over one-time lump-sum investing.
- Intermediaries may introduce transaction thresholds, fee waivers for premium customers, or bundled funding allowances to limit visible consumer friction.