The Cost Of Free Payments For Capital Market Platforms
Leading Indian stockbroking platforms, including Zerodha and INDmoney, have formally raised concerns regarding proposed merchant discount rate (MDR) structures on Unified Payments Interface (UPI) transactions for securities funding.
For years, zero-MDR mandates on UPI have allowed stockbroking platforms to absorb digital transaction charges, providing retail investors with zero-friction wallet deposits. However, payment aggregators and banking partners have proposed charging between 0.15% to 0.30% on high-ticket financial transactions.
A percentage-based interchange fee on capital market inflows directly impacts small retail investors who top up accounts frequently. A reasonable flat cap of ₹5 to ₹10 is the only sustainable balance between payment infrastructure costs and investor participation.
— Nithin Kamath
Understanding the Financial Exposure
Stockbroking apps process over 14 Million daily UPI transactions for account funding during market peak hours. Under proposed percentage models, a ₹50,000 portfolio deposit could incur up to ₹150 in gateway fees.
Frequently Asked Questions
Merchant Discount Rate (MDR) is the fee that a merchant pays to a payment service provider or bank for processing digital transactions.