NSE MD says no govt talks on new UPI Merchant Discount Rate
NEWZA Editorial Team•
⚡ Key Financial Takeaways
NSE MD Ashish Chauhan stated that the new UPI MDR was set by NPCI, not the government.
Capital‑market transactions will incur a 0.02% MDR capped at ₹300 per transaction from 15 October.
UPI person‑to‑merchant transactions above ₹2,000 will carry a 0.4% MDR; lower‑value and small‑merchant payments remain free.
NSE’s debut on the BSE on 24 September saw shares trade at ₹1,800, closing at ₹1,818.
The IPO raised ₹22,561.57 crore through an offer for sale of 12.64 crore shares priced between ₹1,700 and ₹1,785.
💡 Why It Matters
The new MDR framework directly affects the cost of capital‑market transactions, a core activity for NSE and its brokers. By setting a clear fee structure, NPCI aims to standardise payments across the market, while the modest cap ensures that transaction costs remain manageable for traders and investors.
New UPI Merchant Discount Rate framework The National Payments Corporation of India (NPCI) has rolled out a revised Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions, effective 15 October. Under the new scheme, capital‑market activities—including payments involving stockbrokers, securities and mutual funds—will attract an MDR of 0.02 per cent, with a maximum charge of ₹300 per transaction.
For the broader UPI ecosystem, a 0.4 per cent MDR will apply to person‑to‑merchant (P2M) payments that exceed ₹2,000. Transactions up to ₹2,000 and those covered by the zero‑MDR framework for small merchants will continue to be free. The Finance Ministry has indicated that roughly 96 per cent of P2M transactions will not see any change in cost.
NSE’s market debut The National Stock Exchange (NSE) completed its long‑awaited listing on the Bombay Stock Exchange (BSE) on 24 September. Shares opened at ₹1,800 each, close to the IPO issue price of ₹1,785, and finished the first session at ₹1,818. The IPO, valued at ₹22,561.57 crore, was an offer for sale by existing shareholders and comprised 12.64 crore shares priced between ₹1,700 and ₹1,785.
NSE’s response to the new MDR During a post‑listing press interaction, NSE Managing Director and CEO Ashish Chauhan clarified that there had been no discussions with the government regarding the new MDR. He emphasized that the decision was taken by NPCI and that the issue lies between brokers and their clients. “We will have to wait and see,” Chauhan said, adding that brokers and clients would likely find a resolution.
Implications for brokers The introduction of a 0.02 per cent MDR, capped at ₹300, will affect the cost structure for brokers handling capital‑market transactions. While the fee is modest, it could influence fee negotiations between brokers and their clients, especially for high‑volume traders. Brokers will need to reassess their pricing models to maintain competitiveness.
What to watch The next few weeks will reveal how brokers adapt to the new fee structure. Market participants should monitor any adjustments in brokerage rates and potential changes in client agreements. Additionally, the broader impact on P2M transactions—particularly for merchants and small‑business owners—will become clearer as the October 15 implementation date approaches.
🏛️ Background & Context
UPI has become the dominant digital payment platform in India, with billions of transactions each month. The MDR changes are part of a broader effort to regulate payment costs and enhance transparency for both merchants and consumers.
👁️ What To Watch Next
Brokers’ responses to the new MDR, any adjustments in their fee schedules, and the actual uptake of the 0.4 per cent P2M rate for larger transactions will be key indicators of how the market adapts. The Finance Ministry’s statement that 96 per cent of P2M transactions will remain unaffected suggests limited impact on everyday consumers, but the effect on high‑value payments will be closely monitored.
