The reported merchant discount rate (MDR) for payments to stockbrokers and other capital-market entities is 0.02%, capped at ₹300 per transaction.
Now, a ₹20 payment on a ₹1 lakh client deposit may seem small. But to brokers, who already work on wafer-thin margins.
Here's the concern:
If a client adds ₹1 lakh to their trading account through UPI, the broker could pay ₹20 to receive it, and if the client doesn't place a trade, the broker gets no brokerage income from that deposit.
Then, under the client-fund settlement rules, the unused money may have to be returned (which does not trigger the UPI MDR). But if the client later deposits the same ₹1 lakh through UPI again, the broker could pay another ₹20 on that second incoming transfer.
So, the broker could pay ₹40 across two UPI deposits, even if the client never trades.
For comparison, some negotiated net-banking charges are around ₹8–12 per transfer; brokers may start encouraging clients to use different payment options for larger deposits.
Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has said the regulator will examine brokers' concerns.
Watch which payment options brokers recommend after October 15, and that will show us what a 2-basis-point change really means.
Disclaimer: These are my personal views on payment costs in broking, shared for information only. This is not investment advice.
