India's Paytm slumps after government says reports of UPI transaction fees false
FILE PHOTO: A man stands at the Paytm stall during the Global Fintech Fest in Mumbai, India, August 29, 2024. REUTERS/Francis Mascarenhas/File Photo
(Reuters) -Shares of digital payments firm Paytm slumped as much as 10% on Thursday after India's finance ministry said that reports about the introduction of fees on the popular unified payments interface (UPI) transactions were false and baseless.
The shares posted their sharpest intraday fall since February 2024, before coming off lows to trade down 8%. India's benchmark Nifty 50 was trading 0.2% lower.
In India, merchants pay fees to banks or payment service providers, such as Paytm, for transactions. There is no fees on UPI payments.
The delay or non-introduction of the fees is "sentiment negative for Paytm", brokerage UBS said, adding that the firm's adjusted core profits could decline more than 10% in fiscal years 2026 and 2027 if increased incentives are absent.
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala)
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