Mutual fund distributors oppose government UPI MDR plan over profits
The mutual fund world isn't thrilled about the government's plan to add a merchant discount rate (MDR) on a limited set of UPI merchant transactions above a certain threshold.
While regular users won't get charged, mutual fund distributors say these fees could really cut into their already slim profits: think losing nearly one-third of what they make.
They're asking the government to keep investment payments out of this new rule.
Fees could reverse UPI SIPP adoption
UPI is super popular for small monthly investments (about 45% of new SIPs use it), but if these fees kick in, investors might go back to old-school banking channels.
That could slow down investors' move toward digital finance, especially in smaller cities where every rupee counts and extra costs could undermine efforts to bring new investors from smaller cities into the financial ecosystem.