Mumbai, Oct. 2 -- Indian stock brokerages are considering new charges, including mandate-based payments, new transaction fees and scaling back 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 Corporation 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 int...