From October 2026, India introduces a revised UPI fee structure that keeps consumer transfers free but applies minimal charges to high-value business and capital market transactions, potentially impacting investment platforms and traders.
India’s new UPI fee framework is set to leave ordinary consumers untouched, but it will introduce a small charge on some higher-value business payments and a much lower levy on capital market transactions from 15 October 2026. According to reports in Aaj Tak and Mint, the government and the National Payments Corporation of India have now published the revised merchant discount rate, or MDR, structure, which keeps person-to-person transfers free while shifting the cost burden on to merchants and intermediaries in certain cases.
For standard merchant payments above ₹2,000, the MDR will be 0.4%, capped at ₹300 per transaction, Mint reported. But payments linked to capital markets, including mutual funds, securities, stockbrokers and dealers, have been placed in a separate category with a far lower MDR of 0.02%, also capped at ₹300. That means a ₹10,000 investment would carry a fee of ₹2, while a ₹1 lakh transaction would imply ₹20, with the cap applying once the fee rises further.
Aaj Tak said the lower rate is meant to cover UPI payments used for investments such as shares, initial public offerings and mutual funds, rather than everyday retail spending. The key point for investors is that the charge is not supposed to be taken directly from the customer’s bank account as an extra debit. Instead, the framework places the cost on the merchant or intermediary, leaving brokers, mutual fund platforms and other payment handlers to decide how they absorb it.
That distinction matters for systematic investment plan, or SIP, users as well. A monthly ₹10,000 mutual fund contribution would generate only a ₹2 MDR at the new rate, making the absolute cost small. Still, the real-world effect will depend on how investment platforms price or absorb the charge. The Aaj Tak report also noted comments from Ashish Kumar Chauhan, managing director and chief executive of the National Stock Exchange, who suggested that UPI trading volumes could see a short-term effect before stabilising over time.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
