HDFC Securities says 98% of digital transactions insulated from UPI MDR

HDFC Securities anticipates that its current payment distribution will prevent any significant changes to customer pricing under the new UPI guidelines.

While the stockbroking industry expresses growing apprehension regarding the increased costs associated with UPI fund transfers, HDFC Securities has announced that over 98% of transactions on its InvestRight and HDFC SKY platforms will remain unaffected by the upcoming UPI merchant discount rate (MDR) framework.

Data analyzing customer transactions from January to August reveals that the company’s dual platforms handled more than 5.23 crore transactions. Notably, approximately 5.14 crore—representing over 98% of the total—were conducted via net banking or the HDFC Bank-linked 3-in-1 mandate, both of which fall outside the scope of the new MDR rules.

In contrast, UPI-based transactions accounted for less than 2% of the volume, totaling roughly 9.6 lakh transactions. The 3-in-1 mandate route was the dominant method with about 5.1 crore transactions, while net banking services contributed 3.6 lakh.

Minimal Impact Predicted

Due to its specific mix of payment channels, HDFC Securities believes the new regulations are unlikely to force any major adjustments to the pricing offered to its customers. “Our clients have naturally preferred payment methods that offer reliability and ease of use. This established behavior has essentially shielded the vast majority of our users from these regulatory changes,” noted Dhiraj Relli, MD and CEO of HDFC Securities.

This payment structure distinguishes HDFC Securities from many discount brokers, for whom UPI has become the primary method for funding trading accounts. Brokerage associations have notified the Securities and Exchange Board of India (SEBI) that UPI facilitates nearly 90% of all broking transactions and represents roughly two-thirds of the total capital added to trading platforms.

Despite being a major player in the country, HDFC Securities maintains a relatively small share of the retail broking market compared to its overall size. As of August, the firm held approximately 13.5 lakh active clients on the NSE, which constitutes about 3.1% of the exchange’s active client base.

Industry-Wide Concerns

Starting October 15, the new MDR framework will impose a 0.02% charge on UPI transactions within the capital markets sector—covering payments to dealers, mutual funds, securities, and stockbrokers—with a maximum cap of ₹300 per transaction. For eligible person-to-merchant UPI transfers exceeding ₹2,000, the standard MDR is set at 0.4%.

Many brokers have voiced significant concerns that the MDR might be applied the moment funds are moved into a trading account, regardless of whether a trade is actually executed. This creates a scenario where brokers could be hit with transaction costs even on transfers that yield no brokerage revenue.

SEBI Chairman Tuhin Kanta Pandey stated last week that the regulator is reviewing these industry concerns and is looking into potential solutions to mitigate the impact.

Published on September 21, 2026