Mutual funds, stocks UPI payments to attract 0.02% MDR under new NPCI framework

Payments made through the Unified Payments Interface (UPI) towards mutual funds, securities, stockbrokers, dealers and investment platforms will attract a Merchant Discount Rate (MDR) of 0.02%, subject to a maximum charge of Rs 300 per transaction, under the new framework announced by the National Payments Corporation of India (NPCI).

The special rate for capital-market transactions is significantly lower than the standard 0.4% MDR applicable to select person-to-merchant (P2M) UPI transactions above Rs 2,000. The new MDR framework will take effect from October 15, 2026.

Also read: UPI transactions above Rs 2,000 to attract 0.4% MDR; check key details


Under the capital-markets category, the 0.02% MDR will apply to payments made to mutual funds, SEBI-registered brokers and dealers, such as Groww, Zerodha, Upstox and Angel One, as well as investment platforms. The framework covers transactions linked to equity, debt and mutual funds, along with broker wallet top-ups.

For instance, a Rs 50,000 payment towards an eligible capital-market transaction would attract an MDR of Rs 10 at the 0.02% rate. The charge will be capped at Rs 300, limiting the MDR on larger transactions.

The capital-market rate is part of a broader differentiated MDR structure being introduced for UPI.

While standard Person-to-Merchant (P2M) transactions above Rs 2,000 will attract 0.4% MDR, certain sectors have been assigned lower or flat rates. Payments in categories such as railways, telecom, insurance, fuel and utilities above Rs 2,000 will attract a flat Rs 5 MDR.

Also read: UPI charges from October 15: FAQs on who will pay 0.4% MDR and what consumers, small vendors & large merchants need to know

The MDR is a merchant-side charge and UPI users will not be charged a separate fee for making these payments. Person-to-person (P2P) UPI transactions will continue to remain free, while transactions of up to Rs 2,000 will not attract MDR under the new framework.

NPCI has said the MDR revenue will be used within the UPI ecosystem to support infrastructure resilience, innovation, cybersecurity and customer service. The differentiated rates are aimed at creating a revenue stream for sustaining the rapidly expanding digital payments infrastructure while keeping consumer-facing UPI payments free.