Paytm, Mobikwik shares tumble after finance ministry rules out MDR on UPI transactions
Investors sold
Paytm
and
Mobikwik shares
on Thursday, a day after the
Finance Ministry
denied reports of charges on UPI transactions.
Paytm shares
dropped 10% in trade today, before recovering later. The stock was trading 6.56% lower at Rs 897.20 as of 2:30 p.m. The company's market capitalisation dropped as much as Rs 6,123 crore to an intraday low of Rs 55,123 crore, but later returned to Rs 57,233 crore.
Meanwhile,
Mobikwik
shares fell 3% to an intraday low of Rs 273.05 per share. As of 2:35 p.m., the counter was down 2.68% at Rs 273.95. The company's market value dropped to Rs 2,121 crore, before recovering slightly to Rs 2,128 crore.
On Wednesday media reports claimed that the government was planning to levy a Merchant Discount Rate (MDR) on
transactions exceeding Rs 3,000
via the Unified Payments Interface (UPI). Over the last few months, the digital payments industry has been abuzz about MDR coming back on UPI. During their FY25 results call with stock market analysts, senior executives at
Paytm
had expressed optimism about the government considering such a move.
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The ministry later clarified that no such plan is under consideration.
'Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading. Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens. The Government remains fully committed to promoting digital payments via UPI,' a Finance Ministry post on X said.
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MDR is a levy charged on a merchant for processing debit and credit card transactions. UPI and RuPay debit card payments have been exempted from this charge since the presentation of Union Budget 2019-20 to promote digital transactions.
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To support payment ecosystem participants, incentives for the promotion of RuPay debit cards and BHIM-UPI transactions (P2M) up to Rs 2,000 were announced in March. However, banks and fintechs have called the incentives insufficient and want MDR brought back for such transactions to sustain infrastructure and maintenance costs.
Scale of UPI
UPI processed 18.68 billion transactions worth Rs 25.14 lakh crore in May, marking a 33% increase over the year-ago period.
The average daily transaction amount stood at Rs 81,106 crore, with 602 million daily transactions.
For the fiscal year ended March 2024, UPI accounted for 80% of India's retail digital payments.
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