New Delhi, Sept. 16 -- Zerodha co-founder Nithin Kamath said merchant discount rate (MDR) on UPI was "probably inevitable" given the widespread adoption of the payment system.

The National Payments Council of India (NPCI) on Tuesday announced MDR on select UPI transactions conducted from person to merchant. It is likely to come into effect from next month.

In a post on X on Wednesday, Kamath said introducing MDR could also increase competition in the UPI market, where three apps currently account for more than 95% of the market.

However, he said the proposed MDR structure does not make sense for some use cases, including investing and broking.

Kamath said the main problem for brokers is that there is no guarantee that money transferre...