Mumbai, Oct. 3 -- Stock brokerages are considering new charges, including mandate-based payments, new transaction fees and fewer free offerings, to cushion the impact of a merchant discount rate (MDR) on UPI transactions, according to people familiar with the matter. The MDR framework, which takes effect from 15 October and adds a 0.02% charge on UPI transactions for capital-market payments, capped at Rs.300 per transaction, threatens to squeeze already-thin margins. While the National Payments Corp. of India (NPCI) has said UPI charges should not be passed on to consumers, the framework has left brokerages looking for ways to protect their margins regardless. The concern stems from a mismatch: money transferred into a trading account doesn't always result in a trade. An investor may move funds in and leave them unused, while the broker still bears the payment-related cost. Sebi rules compound this, requiring brokers to return unused client funds every month or quarter, generating yet more transactions, and yet more cost, without any corresponding revenue. "Unlike other business transactions, brokerage houses receive funds very often towards margin. Every transaction is not going to generate income," said K. Suresh, president and chief executive officer at India Cements Capital. "We are expecting a hit of Rs.5 crore to Rs.6 crore on revenue monthly after the MDR is implemented. In the long term, we may look at increasing our brokerage costs or introducing another line of charges to offset the impact of the charges," said an official who works for one of the top brokerages in the country....