Centre's no MDR stance derails fintech's UPI monetisation plans
Live Events
The Ministry of Finance's clarification that there was no plan to reintroduce the merchant discount rate (MDR) on payments done via Unified Payments Interface has dampened the monetisation plans that payment firms had around the popular payment ecosystem.Shares of listed payment firms fell Thursday, a day after the ministry said speculations about the return of the fee for processing UPI payments were 'completely false, baseless and misleading'. One 97 Communications , which runs the payment platform Paytm , closed 6.8% lower at Rs 895.15 on the BSE. One Mobikwik Systems, which operates the Mobikwik application, ended 2.6% down at Rs 274.15.'It will be business as usual since we have been operating without MDR for a few years now. But there was hope in the industry that MDR would be brought back at least for big-ticket transactions; now that is gone,' the chief executive of a major payment processor said on the condition of anonymity.A senior banker who leads the payments function at a private sector lender pointed out that once the government has got the merchant ecosystem used to free digital payments, bringing back the system was always going to be a challenge.Over the last two months, the industry circle was abuzz with conversations around the government seriously considering bringing back MDR, but only for large purchases.'Obviously, we do not know much, and we will not like to predict how the government is looking at it, but we definitely see talks of MDR coming on UPI,' Paytm chief executive Vijay Shekhar Sharma said during the company's FY25 analyst call. He said it could help in building monetisation opportunities from the core payments business for firms like Paytm.Industry insiders also pointed out that fintech firms have been encouraging customers to move to instruments like mobile wallets or prepaid payment instruments (PPIs) and credit cards, which are MDR generating instruments.'MDR on PPI-UPI, something that is already in motion from the RBI and it is under discussion in the payments ecosystem across multiple industry players and should go live soon. From our perspective, it will definitely bring a new source of revenue, which today we are not getting,' Mobikwik cofounder Bipin Preet Singh said during the FY25 analyst call.While listed firms were talking about projected revenue opportunities, the ministry clarification on MDR could have an impact on fintech IPOs lined up for the coming months.ET reported on May 19 that PhonePe gets 95% of its revenue from digital payments and UPI payments is a core aspect of that business. The company is in the process of filing for an IPO in the second half of the current year. Merchant payments company Pine Labs, which is set to file its draft IPO papers this month, gets a significant share of payments via UPI. For Razorpay, another company planning to go public by 2026, UPI accounts for a significant chunk of business.'We have seen almost all forms of innovation and new investments stop in the core payments business. There was hope in the industry that some of it would come back, but it seems that is also gone,' said the founder of another payments firm.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
19 minutes ago
- Time of India
Contractors send notice to govt over ₹90,000cr pending dues, warn of going to court
Pune: Contractors executing critical infrastructural works across Maharashtra have sent a legal notice to the state govt on June 10, demanding payment of dues amounting to over Rs 90,000 crore. The notice sent to the chief minister, deputy chief ministers, chief secretary and heads of key departments, warned that they will approach Bombay high court if a payment schedule is not provided within a fortnight. The contractors, represented by Builders' Association of India (BAI) — a national body with over 230 branches — say dues include payments for roads, bridges, water supply, irrigation, and govt building repairs taken up for over a year. Public Works Department (PWD) alone owes them over ₹46,000 crore, association members said. "We wrote to govt in Feb but no concrete action was taken. We have now issued a formal legal notice. The situation is untenable," a senior BAI member, requesting anonymity, said. He added that it is discouraging to carry out infrastructural works when funds are not released on time. "Govt must revert within a fortnight or else we will have to take up the issue in Bombay high court," the BAI member told TOI. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pinga-Pinga e HBP? Tome isso 1x ao dia se tem mais de 40 anos Portal Saúde do Homem Clique aqui Undo The notice states that non-payment of running bills has severely impacted contractors' ability to repay bank loans, leading to many accounts being classified as non-performing assets (NPAs). "This financial stress is not due to any fault of the contractors but entirely due to non-release of funds by the state," it reads. BAI said many projects under the Hybrid Annuity Mode (HAM) where semi-annual payments are promised post-completion have also been affected. "Payments are irregular and often as low as 6% to 7% of the billed amount which dissuades young contractors from entering the construction sector," the notice states. During repeated meetings with govt officials, BAI members say they have been told that budget constraints are delaying payments. What has angered the contractors is the state's massive outlay for Mukhyamantri Mazhi Ladki Bahin Yojana launched last year. "We have been waiting for our dues for works that have been completed. But here, govt is handing out Rs 1,500 monthly to 2.46 crore women spending over Rs 3,700 crore every month," the BAI member said. Text messages to the offices of the chief minister Devendra Fadnavis and finance minister Ajit Pawar remained unanswered at the time of going to press. Break-up of dues PWD I ₹46,000 crore Jal Jeevan Mission I ₹18,000 crore Water Resources Department I ₹19,700 crore Rural Development Department I ₹8,600 crore Urban Development Department I ₹1,700 crore (BAI sources) Govt is free to run welfare programmes, but it must pay contractors who have completed public infrastructural work using borrowed funds BAI Member Pune: Contractors executing critical infrastructural works across Maharashtra have sent a legal notice to the state govt on June 10, demanding payment of dues amounting to over Rs 90,000 crore. The notice sent to the chief minister, deputy chief ministers, chief secretary and heads of key departments, warned that they will approach Bombay high court if a payment schedule is not provided within a fortnight. The contractors, represented by Builders' Association of India (BAI) — a national body with over 230 branches — say dues include payments for roads, bridges, water supply, irrigation, and govt building repairs taken up for over a year. Public Works Department (PWD) alone owes them over ₹46,000 crore, association members said. "We wrote to govt in Feb but no concrete action was taken. We have now issued a formal legal notice. The situation is untenable," a senior BAI member, requesting anonymity, said. He added that it is discouraging to carry out infrastructural works when funds are not released on time. "Govt must revert within a fortnight or else we will have to take up the issue in Bombay high court," the BAI member told TOI. The notice states that non-payment of running bills has severely impacted contractors' ability to repay bank loans, leading to many accounts being classified as non-performing assets (NPAs). "This financial stress is not due to any fault of the contractors but entirely due to non-release of funds by the state," it reads. BAI said many projects under the Hybrid Annuity Mode (HAM) where semi-annual payments are promised post-completion have also been affected. "Payments are irregular and often as low as 6% to 7% of the billed amount which dissuades young contractors from entering the construction sector," the notice states. During repeated meetings with govt officials, BAI members say they have been told that budget constraints are delaying payments. What has angered the contractors is the state's massive outlay for Mukhyamantri Mazhi Ladki Bahin Yojana launched last year. "We have been waiting for our dues for works that have been completed. But here, govt is handing out Rs 1,500 monthly to 2.46 crore women spending over Rs 3,700 crore every month," the BAI member said. Text messages to the offices of the chief minister Devendra Fadnavis and finance minister Ajit Pawar remained unanswered at the time of going to press. Break-up of dues PWD I ₹46,000 crore Jal Jeevan Mission I ₹18,000 crore Water Resources Department I ₹19,700 crore Rural Development Department I ₹8,600 crore Urban Development Department I ₹1,700 crore (BAI sources) Govt is free to run welfare programmes, but it must pay contractors who have completed public infrastructural work using borrowed funds BAI Member Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
Time of India
19 minutes ago
- Time of India
Freeze only disputed amount in cyber fraud cases: New guidelines
Jaipur: Rajasthan police headquarters has directed that bank accounts should not be entirely frozen during investigations into financial disputes and cyber crime frauds. The new guidelines instruct that only the specific amount under dispute may be held, and even that requires written approval from the district SP. Account holders must be allowed to continue using the rest of their funds freely. The instructions were sent to all police commissioners, range IGs, DIGs, and district SPs following directions from Rajasthan High Court's Jaipur bench. The move aims to prevent hardship caused by freezing entire accounts, particularly in civil disputes with financial elements. The circular also highlights that if a case involves cash transactions of Rs 2 lakh or more—especially in property deals or contracts—police must report the details to the Income Tax Dept. These must be submitted in the prescribed format to Kunal Haver, joint director of Income Tax and the designated nodal officer in Jaipur. Police have been clearly told not to register FIRs in purely civil disputes where there is no evident criminal liability. If both civil and criminal aspects are present and an FIR was already registered, no arrest or document seizure can be carried out without prior written approval from the District SP. Where the alleged offence carries a sentence of at least 3 years and up to 7 years, and no clear cognisable offence is immediately visible, a preliminary inquiry must be completed within 14 days under Section 173(3)(i) of Bharatiya Nagarik Suraksha Sanhita, 2023. The decision to file an FIR will depend on the findings of this inquiry. The DGP's office has also reminded all officers to strictly follow the Supreme Court's guidelines in the Lalita Kumari vs State of Uttar Pradesh case before registering FIRs in ambiguous matters. These new directions are intended to curb the misuse of criminal law in civil matters and to safeguard individuals' financial and legal rights from arbitrary police actions. In yet another directive, the PHQ has also forwarded details of suspicious bank accounts to the superintendent of police concerned for a detailed probe into the transactions being conducted through these accounts. Sources said that many of these accounts are under the radar for their use as mule accounts in cyber fraud cases. A cyber security campaign is being run until June 25. "Under the campaign, one of the focus areas is to identify suspicious transactions in bank accounts which are flagged through Samanvaya portal - a ministry of home affairs initiative. These accounts are suspected to have been used for laundering money stolen in cyber frauds," said a senior police officer. He added that the district SPs have been asked to probe these bank accounts. Hundreds of such accounts are being monitored in each district. For example, in Bikaner, over 550 bank accounts are currently under radar. Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
Deccan Herald
36 minutes ago
- Deccan Herald
Hyderabad: ED restitutes Rs 611 cr worth Agri Gold ponzi scheme properties
The present market value of the impugned properties is expected to be more than Rs. 1000 Crore.
