Paytm Share Price Recovers From 7% Fall As NPCI Clarifies UPI MDR Delay; Pine Labs, MobiKwik Rebound

Paytm, Pine Labs and MobiKwik shares staged a sharp intraday recovery on Tuesday, October 13, after the National Payments Corporation of India (NPCI) clarified that the proposed 0.4% Merchant Discount Rate (MDR) on select UPI transactions has only been deferred and will be implemented after Diwali.

Shares of One 97 Communications, the parent company of Paytm, had crashed as much as 7.04% earlier in the session to an intraday low of ₹1,571 after reports that the October 15 rollout had been postponed. The stock subsequently recovered its entire fall and, at around 2:15 pm, was trading at ₹1,691.20 on the NSE, marginally higher by 0.07%.

The recovery was also visible in other payment stocks. Pine Labs, which had fallen around 4% earlier, was trading 1.57% higher at ₹165.58 at 2:15 pm. One MobiKwik Systems had also reversed its losses and was up 0.74% at ₹242.53.

The sharp reversal came as the market received clarity that the proposed UPI MDR has not been withdrawn. NPCI said the charge will be implemented immediately after Diwali, with the exact date to be notified separately.

Why Did Paytm Shares Recover From A 7% Fall?

Payment stocks initially came under heavy selling pressure after NPCI deferred the rollout of the 0.4% MDR, which was scheduled to take effect from October 15.

The delay was seen as a setback for Paytm and other payment companies because MDR is expected to provide an additional revenue stream from eligible UPI merchant transactionsNPCI subsequently clarified the timeline, saying the decision was taken keeping the festive season in mind and that implementation would follow immediately after Diwali.

“UPI and Services Steering Committee today decided that, keeping in mind the festive season, Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions, shall be implemented immediately post Diwali at a date to be notified separately,” NPCI said.

That distinction is important for payment companies. The MDR framework itself remains intact, meaning the potential revenue opportunity has been delayed rather than removed.

Paytm shares reflected that change in sentiment during Tuesday's session. After touching ₹1,571 in the morning, the stock recovered to ₹1,691.20 by 2:15 pm, a rebound of more than ₹120 from its intraday low.

Pine Labs, MobiKwik Shares Also Reverse Losses

Pine Labs had fallen around 4% earlier in the session but recovered to ₹165.58 by 2:15 pm, up 1.57%. MobiKwik also erased its earlier decline and was trading 0.74% higher at ₹242.53.

Under the proposed framework, a 0.4% MDR will apply to select person-to-merchant UPI transactions above ₹2,000. The rollout had originally been scheduled for October 15 but will now begin after Diwali on a date to be announced by NPCI.

For payment companies, the introduction of MDR is important because UPI merchant payments have operated without a standard merchant charge for several years. The new framework could therefore create an additional source of transaction-linked revenue.

Paytm had earlier said the introduction of MDR would generate additional revenue from merchant payments that were previously free.

Tuesday's price action showed how quickly the market's interpretation of the announcement changed. Investors initially reacted to the postponement as a delay to the expected revenue opportunity, sending payment stocks sharply lower. Once NPCI clarified that implementation would follow immediately after Diwali, Paytm, Pine Labs and MobiKwik recovered their losses.

At 2:15 pm, all three stocks were trading in positive territory, with Pine Labs up 1.57%, MobiKwik up 0.74% and Paytm marginally higher after having fallen more than 7% earlier in the day.

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