Zerodha, INDmoney flag UPI MDR costs; Kamath seeks ₹5-10 cap
Zerodha and INDmoney say the proposed 0.02% UPI MDR on capital-market transfers could raise costs even when deposits do not result in trades. Zerodha’s Nithin Kamath has proposed a ₹5-10 cap, while PhonePe sees revenue potential from eligible transactions.
What happened
Zerodha and INDmoney warn that new UPI MDR on capital-market fund transfers could impose major costs even when deposits do not lead to trades. Zerodha seeks a
Key facts
- UPI MDR for capital-market transactions: 0.02%, capped at ₹300
- Standard merchant UPI MDR above ₹2,000: 0.4%, capped at ₹300
- Kamath proposed broking MDR cap of ₹5-10
- INDmoney illustration: ₹200 crore daily UPI inflows could incur ₹4 lakh daily MDR
- PhonePe says about 96% of merchant transactions remain outside MDR scope
What changed
Zerodha and INDmoney warn that new UPI MDR on capital-market fund transfers could impose major costs even when deposits do not lead to trades. Zerodha seeks a ₹5-10 cap, while PhonePe expects payments-business revenue from eligible MDR transactions.
Why this matters
Prepare to absorb, pass through, or reroute the new 0.02% UPI MDR on capital-market deposits, as even non-trading transfers could raise customer friction and operating costs unless a ₹5-10 cap is adopted.
What to watch
- NPCI, RBI, or government clarification on transaction eligibility, exemptions, and implementation mechanics before October 15.
- Whether the proposed ₹5-10 cap gains support from broker associations, fintech platforms, or regulators.
- Broker announcements of pass-through fees, minimum deposit values, or discontinued UPI funding for select account types.
- Changes in UPI deposit conversion, average deposit size, repeat funding frequency, and abandonment rates after implementation.
- PhonePe, Google Pay, Paytm, or bank UPI apps launching broker-focused payment products or pricing arrangements.
Also reported by
- Inc42 · Buzz — Same time