NSE CEO Ashish Chauhan clarified that there have been no discussions with the government about the new UPI Merchant Discount Rate (MDR) that will kick in on October 15. He said the issue is between brokers and their clients, and the regulator is not intervening. The new MDR framework raises the fee that merchants and payment aggregators can charge for UPI transactions used in capital‑market activities, such as buying stocks, mutual fund SIPs, and bond purchases.
For retail investors who rely on UPI for low‑cost trading, the higher cost could shrink net returns, especially in a market where brokerage fees are already under pressure. Analysts expect a modest dip in transaction volumes, though the Sensex and Nifty have remained largely unchanged since the announcement. With the government not stepping in, brokers are expected to negotiate the pass‑through of the MDR with clients.
Investors should review their brokerage statements, compare alternative payment modes like net‑banking or card, and factor the extra charge into their cost‑of‑investment calculations. Keeping an eye on fee disclosures will help retail traders protect their portfolio performance as the new rate takes effect. In short, the onus now lies with brokers and investors to manage the higher UPI cost, and any delay in resolution could subtly affect trading activity and overall market liquidity.