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Economic Times
2 days ago
- Business
- Economic Times
Paytm shares crash 10% as Finance Ministry dismisses MDR speculation
Paytm share price plummeted by 10% following the Finance Ministry's denial of impending MDR charges on UPI payments, a fee banks charge merchants. This clarification countered reports suggesting MDR imposition on large UPI transactions. The Payments Council of India had previously requested MDR reintroduction. UPI continues its dominance, processing 18.68 billion transactions in May, totaling ₹25. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads 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 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 several reports circulated online claiming that the government was planning to impose MDR on large-ticket UPI baseless and sensational speculations cause unnecessary uncertainty, fear, and suspicion among our citizens, the ministry said in a strongly worded 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 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 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 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 success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume.
NDTV
3 days ago
- Business
- NDTV
Exclusive: Government Weighs Charges On UPI Payments Over Rs 3,000
New Delhi: In a move to support banks and payment service providers in managing infrastructure and operational costs, the government is considering reintroducing the Merchant Discount Rate on all the Unified Payments Interface (UPI) payments above Rs 3,000. Sources told NDTV Profit that discussions are underway to allow the Merchant Discount Rate based on transaction value rather than merchant turnover. This comes as banks and payment service providers have raised concerns about the rising cost of handling high-value digital transactions. "While small-ticket UPI payments would likely remain exempt, larger transactions could soon carry a merchant fee, reversing the zero-MDR policy in place since January 2020," a source told NDTV Profit. The UPI accounts for nearly 80 per cent of the retail digital transactions. But the zero Merchant Discount Rate regime has limited incentives for further investment in the sector. The Payments Council of India has proposed a 0.3 per cent Merchant Discount Rate on large merchants for UPI transactions. Currently, the Merchant Discount Rate on credit and debit card payments ranges from 0.9 per cent to 2 per cent, excluding RuPay. "RuPay credit cards are expected to remain outside the Merchant Discount Rate scope for now," a source told NDTV Profit. Officials said that a decision on weighing charges on the UPI payments is likely to be made in a month or two after consultations with stakeholders, including banks, fintech firms, and the National Payments Corporation of India. If it is implemented, the policy would mark a shift from incentivising UPI adoption to ensuring long-term sustainability of the digital payments ecosystem.
