Zerodha founder Nithin Kamath says there is no guarantee that customers who transfer funds into brokerage accounts will actually place trades, while brokers may still have to pay UPI-related charges. He warns that this creates a risk that brokers could absorb the cost for every money transfer, even when no trading happens.
The issue relates to UPI MDR (merchant discount rate), which determines fees on certain payment transactions. Kamath questions how long such costs can be borne if transfers do not consistently convert into customer activity on trading platforms. His comments center on the financial impact on brokerage firms rather than on customer usage of UPI itself.
Across the outlet coverage provided, the reporting emphasizes Kamath’s concern about the economic model and the timing of costs relative to trading outcomes. The cited remarks frame MDR as a potential burden for brokers, especially under conditions where fund inflows are not matched by trades.
