Paytm shares crash 10% as Finance Ministry dismisses MDR speculation
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Shares of One 97 Communications , which runs the payments platform Paytm , on Thursday fell up to 10% to the day's low at Rs864.20 on BSE after the Finance Ministry dismissed reports about the possible introduction of a merchant discount rate (MDR) for UPI payments.Banks or payment services providers like Paytm earn a fee, which is called MDR, from merchants for processing payments in real time. To promote digital payments, the government has waived MDR charges on UPI transactions.But several reports circulated online claiming that the government was planning to impose MDR on large-ticket UPI transactions.Such baseless and sensational speculations cause unnecessary uncertainty, fear, and suspicion among our citizens, the ministry said in a strongly worded statement.In March, the Payments Council of India , which represents digital payment companies, wrote to Prime Minister Narendra Modi seeking the reintroduction of the MDR on UPI and RuPay debit card transactions. The industry body recommended a 0.3% MDR on UPI payments for large merchants and a nominal MDR on RuPay debit card transactions for all merchants.As of April, PhonePe and Google Pay continue to dominate the space, accounting for over 80% of UPI market share. Newer players such as Flipkart-backed Super. Money, Navi, BHIM, and Cred are gradually increasing their presence through cashback offers and other incentives.Meanwhile, UPI processed 18.68 billion transactions in May. In value terms, UPI transactions totalled 25.14 lakh crore rupees in May, up from 23.95 lakh crore rupees in April.The May figures also mark a 33 per cent year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at 81,106 crore rupees, while the average daily transaction volume was 602 million.The success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume.
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