Indian retailers, stockbrokers oppose new fee on UPI payments

stockbrokers: Stockbrokers in India are licensed intermediaries who execute trades in securities for clients and increasingly rely on UPI for collecting funds, fees, and other payments from investors. In this news, they are among the financial market participants pushing back against the new UPI merchant fee, concerned that charges on capital-market related UPI transactions will increase operational costs and potentially impact how they structure client payments. Indian retailers: Indian retailers are businesses that sell goods and services to consumers across physical stores and online channels, and have widely adopted the Unified Payments Interface (UPI) for low-cost, instant digital payments. In this news, they are directly affected by the newly introduced merchant discount rate (MDR) on larger UPI payments, which they fear will raise payment acceptance costs and squeeze already thin profit margins. Regulation: India’s National Payments Corporation of India (NPCI), which operates UPI, has introduced a merchant discount rate on person-to-merchant UPI payments above a defined threshold, ending a long period in which UPI merchant payments were effectively free. Adoption_trend: UPI’s rapid adoption across retail and financial services was driven in part by the absence of merchant fees, so the newly imposed MDR is seen by many businesses as a significant shift in the economics of digital payments, even though person-to-person transfers remain free. Cost_structure: Capital-market related UPI payments to entities such as brokers and mutual funds are now subject to a specific fee structure under the new MDR regime, prompting concerns among these firms about higher transaction costs and margin pressure.