Shares of Paytm, MobiKwik and Pine Labs rallied up to 6% on Wednesday after the government announced the first-ever Merchant Discount Rate (MDR) on select UPI transactions above Rs 2,000.
In today's early session, Paytm rose 6% to a day's high of Rs 1,829 per share, while One MobiKwik Systems rose over 5% to Rs 213 on the BSE. Pine Labs gained nearly 3% to Rs 199 per share on the NSE.
The National Payments Corporation of India (NPCI) on Tuesday announced that the government will introduce MDR on some Person-to-Merchant (P2M) UPI transactions from October 15 onwards, with merchants paying 0.4% on transactions above Rs 2,000. The maximum fee that can be levied on such transactions will be Rs 300 for payments of Rs 75,000 or more.
Also read | UPI transactions above Rs 2,000 to attract 0.4% MDR; check key details
What new UPI charges mean for consumers?
It is important to note that consumers will not be charged for UPI payments, and Person-to-Person (P2P) transfers will remain free. Small merchants classified under the P2PM framework, including vendors that receive up to Rs 1 lakh a month through UPI QR codes, will continue to be exempt from MDR.
Transactions worth up to Rs 2,000 will continue to carry zero charges and account for more than 95% of UPI’s P2M transaction volume, according to the FAQ released by the government. The NPCI clarified that MDR will be borne by merchants and cannot be passed on to customers. This implies that consumers will continue to pay the listed price when using UPI, with no separate transaction or platform fee imposed by UPI apps.
