Zerodha and INDmoney flag UPI MDR concerns and seek a ₹5–10 cap.
Investment platforms Zerodha and INDmoney have raised concerns regarding the financial burden of the new merchant discount rate on UPI transactions.
Major Indian investment platforms Zerodha and INDmoney have publicly highlighted the potential cost impact that a new merchant discount rate on UPI transactions could impose on digital brokers.1 As the digital payments ecosystem continues to scale rapidly across the country, industry leaders are navigating shifting regulatory landscapes and transaction fee structures that directly affect operational margins for retail trading platforms.
The mounting discussions around transaction costs stem from the widespread adoption of unified payments interface infrastructure for funding trading accounts and executing retail investments. Platforms like Zerodha and INDmoney process massive volumes of retail deposits daily, making transaction routing fees a critical component of their overall operational cost structures.
Industry stakeholders are closely monitoring how fee implementations will evolve across payment gateways and banking networks. The current dialogue emphasizes balancing the commercial viability of digital fintech services with the ongoing push for frictionless, cost-effective retail investing for millions of Indian users.
To mitigate potential margin pressures on high-frequency retail transactions, Zerodha founder Nithin Kamath has actively sought policy adjustments, proposing a fixed cap of ₹5 to ₹10 on UPI transactions for brokerage services. 1 Such a measure aims to protect discount brokers and retail investors from disproportionate percentage-based fee hikes.
As regulatory bodies and fintech leaders continue consultations, the outcome of these fee caps will significantly influence the unit economics of online brokerages. Maintaining affordable payment rails remains essential for sustaining India’s ongoing retail investment boom.
