The point
From 15 October 2026, a UPI payment to a stock broker or a mutual fund carries a Merchant Discount Rate of 0.02 percent, capped at ₹300 a transaction. The charge sits on the receiving side. A ₹1 lakh transfer costs the receiver ₹20, and the sender is still debited ₹1 lakh. The rate that grabbed headlines, 0.4 percent, belongs to ordinary merchant payments and is a different number from the one an investor meets.
What is an MDR, and who pays it?
An MDR, or Merchant Discount Rate, is the fee a business pays for accepting a digital payment. It is deducted on the receiving side, so the person paying never sees it as a line on their own bank statement. INDmoney describes it as the cost a merchant pays to accept a payment. Banks, merchant acquirers and UPI apps share it (source: INDmoney, UPI charges above ₹2,000 explained, updated 16 September 2026, read 2026-10-05).
The same framework keeps the sender's side clear. Business Today reports that consumers continue to use UPI free of cost. UPI apps are not permitted to levy a platform fee or any other charge for making a UPI payment. Banks have been advised to ensure merchants do not pass the MDR on to the customer (source: Business Today, published 15 September 2026, read 2026-10-05).
So the first answer to "who pays" is the party receiving the money.
What are the rates on 15 October 2026?
There are several rates, and the capital-market one is the lowest of the percentage-based ones. As reported by Business Today on 15 September 2026, from 15 October 2026:
- Person-to-person UPI transfers carry no MDR, whatever the amount.
- Person-to-merchant payments up to ₹2,000 carry no MDR.
- Person-to-merchant payments above ₹2,000 carry 0.4 percent, capped at ₹300 a transaction.
- Railways, telecom, insurance, fuel and similar categories carry a flat ₹5 above ₹2,000.
- Capital-market payments, covering mutual funds, securities, stock brokers and dealers, carry 0.02 percent, capped at ₹300 a transaction.
Source: Business Today, 15 September 2026, https://www.businesstoday.in/personal-finance/story/upi-mdr-rules-rs12-on-rs3000-rs200-on-rs50000-and-rs300-cap-on-rs75000-payments-check-faqs-555724-2026-09-15, read 2026-10-05.
The government estimates only 4 percent of merchant transactions will be affected. Most fall below ₹2,000 or qualify for zero MDR (source: Business Today, government statement on UPI MDR, published 15 September 2026, read 2026-10-05).
How does the arithmetic work on an investing payment?
The rate applies to the full amount of the transaction, and the cap puts a ceiling on it. Three transfers show the shape.
A ₹1 lakh transfer to a broker: ₹1,00,000 × 0.02% = ₹20. INDmoney works the same example and notes the investor still sees ₹1 lakh debited from the bank and ₹1 lakh credited to the trading balance.
A ₹5 lakh transfer: ₹5,00,000 × 0.02% = ₹100.
A ₹20 lakh transfer: ₹20,00,000 × 0.02% = ₹400, which exceeds the ₹300 cap, so the charge is ₹300.
The cap starts to bind at ₹15 lakh, because ₹300 ÷ 0.0002 = ₹15,00,000. Above that figure the charge stops growing. A ₹50 lakh payment and a ₹15 lakh payment cost the receiver the same ₹300.
Set that beside the standard rate. At 0.4 percent, ₹1 lakh would come to ₹400, and Business Today notes the cap would hold it to ₹300. The capital-market rate brings the same ₹1 lakh payment down to ₹20, which is one twentieth of the standard 0.4 percent figure (0.02 ÷ 0.4 = 0.05).
Take a monthly routine of ₹25,000 sent by UPI. Each payment is ₹25,000 × 0.02% = ₹5 on the receiving side, or ₹60 across twelve payments. That is the platform's cost, and the investor's bank still debits ₹25,000 each time.
Can the platform pass the charge on?
The framework says it should not reach the sender as a UPI fee. Platform fees on UPI payments are not permitted, and merchants are barred from directly passing the MDR to customers, according to Business Today. INDmoney states the same point in its own words: the meaningful change happens behind the payment.
My view: the number to watch is whether any line on your own statement changes. A broker or fund house that absorbs a ₹20 cost on a ₹1 lakh transfer has taken on a small, known expense. A platform that adds a "payment fee" line is a different event, and one the framework says should not happen on the UPI leg. Reading the charge schedule is the check. The method is in how to read a crypto platform's fee schedule, and it applies to any platform you fund by UPI.
One boundary needs saying plainly. The reports cited here name the capital-market category as mutual funds, securities, stock brokers and dealers. They do not settle how every other kind of platform is classified. Which category a payee falls under determines which rate it pays, so the 0.02 percent figure is a statement about that named list.
What does this change for an investor?
Very little in cash terms, because of the shape of the cost. A fixed cost per transaction matters most when payments are small and frequent, and a percentage cost matters when payments are large. Here the percentage is small (0.02) and the cap stops it growing past ₹300, so a larger transfer costs the receiver proportionally less.
That does not make every other cost on the investing path small. A fee the sender sees and a fee the receiver absorbs are different costs. Four costs a crypto fee page never shows covers the ones that do reach the investor. For a recurring investment, how a crypto SIP works lays out the instalment mechanics.
On Qatobit, INR deposits and withdrawals go through bank transfer (NEFT, RTGS or IMPS), and Qatobit charges nothing on them. The MDR framework above does not change that.
Frequently asked questions
Do I pay a fee when I add money to my broker by UPI?
Not as a UPI charge. From 15 October 2026 the MDR on capital-market payments is 0.02 percent, capped at ₹300, and it is a merchant-side cost. Business Today reports that UPI apps cannot charge the sender a platform fee.
What is the UPI MDR for mutual funds and stock brokers?
It is 0.02 percent of the transaction, with a cap of ₹300 a transaction, from 15 October 2026. A ₹1 lakh payment works out to ₹20 (₹1,00,000 × 0.02%).
At what amount does the ₹300 cap apply to capital-market payments?
At ₹15 lakh. ₹15,00,000 × 0.02% = ₹300, so any payment above that costs the receiver ₹300 and no more.
Is the 0.4 percent UPI charge applied to investments?
No. The 0.4 percent applies to eligible person-to-merchant payments above ₹2,000, capped at ₹300. Capital-market payments have their own 0.02 percent rate.
Do person-to-person UPI transfers carry an MDR?
No. Business Today reports that person-to-person transfers stay free irrespective of the amount.
Crypto investments are subject to market risk. Not financial advice.
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