Home / Business and Economy / Paytm Shares Tumble Amid UPI MDR Rollout Delay
Paytm Shares Tumble Amid UPI MDR Rollout Delay
8 Oct
Summary
- Paytm shares dropped 10% following reports of a UPI MDR deferral.
- The new UPI MDR framework's revenue benefits are postponed for payment firms.
- The rollout delay aims to keep UPI payments free for merchants during the festive season.
Shares of One97 Communications, the parent company of Paytm, experienced a significant drop of up to 10% on October 8, 2026. This market reaction was primarily due to reports suggesting a substantial delay in the rollout of the new Merchant Discount Rate (MDR) framework for Unified Payments Interface (UPI) transactions.
The proposed deferral, potentially pushing the implementation to January 1, 2027, has directly impacted investor sentiment towards payment companies. Firms like Pine Labs and One MobiKwik Systems also saw their stock prices decline, as the delay curtails the near-term revenue opportunities anticipated from the new MDR regime. This framework, initially slated for October 15, 2026, would have levied a 0.4% MDR on specific person-to-merchant (P2M) UPI transactions exceeding Rs 2,000.
Payment companies, including Paytm, had previously anticipated significant revenue growth from the new MDR, which would apply to transactions previously processed without charge. The postponement means these anticipated financial benefits are now expected later than planned. This development follows closely on the heels of Paytm Payments Bank Ltd. being removed from the Second Schedule of the RBI Act, a step in its ongoing winding-up process.
The decision to consider delaying the MDR implementation until January 1, 2027, is reportedly a move to ensure UPI payments remain free for merchants throughout the busy festive period. This is in response to objections from retail traders' associations, highlighting a balancing act between industry monetization and merchant affordability.
