Paytm, MobiKwik Shares Rise As UPI MDR Returns
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Paytm and MobiKwik shares rose up to 7% after NPCI announced 0.4% UPI MDR above ₹2,000. Pine Labs fell 6%. Read more for details.
Paytm and MobiKwik shares jumped as much as 7% and 6%, respectively, in Wednesday’s intraday trade following the announcement of a new merchant discount rate (MDR) on select Unified Payments Interface (UPI) transactions.
Investors viewed the move as a potential new revenue stream for the payments industry.
Paytm shares touched a fresh 52-week high of ₹1,856.50 on the Bombay Stock Exchange (BSE) in early trade. At 10:00 AM, it was trading 0.78% up at ₹1,743.50. MobiKwik rose to ₹214 when markets opened but quickly gave up its gains around 10 AM, trading 0.77% lower at ₹199.31. Meanwhile, Pine Labs fell 6% to ₹182.
The market reaction came after the National Payments Corporation of India (NPCI) confirmed that a 0.4% MDR would apply to person-to-merchant UPI payments above ₹2,000 from 15 October.
What Does The New UPI MDR Mean?
Under the new framework, the MDR will be paid by merchants rather than consumers. Person-to-person UPI payments will remain free, while payments of up to ₹2,000 to merchants will also carry no MDR. The charge will be capped at ₹300 for transactions of ₹75,000 and above.
Certain sectors, including railways, telecom, insurance, and fuel, will have a flat MDR of ₹5 on transactions above ₹2,000. Small merchants receiving less than ₹1 lakh a month through UPI will also remain under a zero-MDR framework.
The government said the move is aimed at making the UPI ecosystem financially sustainable while continuing to support its expansion. MDR revenue will remain within the payments ecosystem and can be used towards infrastructure, cybersecurity, fraud prevention, and merchant expansion.
Why Are Payments Stocks Reacting?
The return of MDR ends a more than six-year period in which UPI merchant payments carried no such fee. The policy could give payment banks, fintech firms, and third-party payment applications a way to generate revenue from transactions that have so far largely been volume-driven.
UPI processed 24.51 billion transactions worth ₹29.9 lakh crore in August 2026. However, around 96% of merchant transactions are expected to remain unaffected by the new framework, helping keep everyday digital payments free.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
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