The National Payments Corporation of India (NPCI) has introduced a Merchant Discount Rate (MDR) of up to 0.4% on UPI Person-to-Merchant (P2M) transactions above Rs 2,000. Paytm, One Mobiwik and other digital payment stocks are in focus on hopes of additional revenue once it is effective.
The new charge will come into effect from October 15. Important to note that there will be no charge on customers for UPI payments.
Paytm, One Mobiwik to earn from UPI transactions
One 97 Communications, the parent company of Paytm, said that the changes “will generate additional revenue from the merchant business for many of the payment transactions that were free earlier.”
Paytm said it will make further disclosures, if required, once the NPCI circular becomes effective and the impact on its business is ascertained.
One Mobiwik also said “The Company views this development as a strong enabler of its plans to deepen its presence in UPI and scale its merchant business.”
One Mobiwik expects to earn the revenue through two channels. The first is as a Third-Party Application Provider (TPAP), based on its share of consumer UPI Gross Merchandise Value (GMV) in P2M transactions.
The second is as an acquirer on its merchant GMV.
UPI payments above Rs 2,000 to attract MDR
NPCI, which operates retail payment systems in India, including the Unified Payments Interface (UPI), announced the change through a circular dated September 15.
Under the new framework, merchants can be charged an MDR of up to 0.4% for UPI P2M transactions exceeding Rs 2,000.
MDR is a fee charged on a digital payment transaction. It is generally paid by the merchant and is not charged directly to the customer.
About One 97 Communications
One 97 Communications (OCL), the parent company of Paytm, operates a digital payments and financial services platform in India. Through the Paytm app, the company offers services including UPI payments, bill payments, and recharges.
One 97 Communications was incorporated on December 22, 2000, and is listed on both the BSE and NSE under the ticker PAYTM.
About Mobiwik
One MobiKwik Systems is a publicly listed fintech company founded in 2009 by Bipin Preet Singh and Upasana Taku. The company operates a digital payments and financial services platform offering products including MobiKwik Wallet, UPI, Pocket UPI and Zaakpay, along with consumer credit, investments and savings products.
Paytm share price
The share price of Paytm opened 5% higher and has been trading firm in intra-day session.
Paytm shares have gained 57.3% in the past three months and 71.88% in the last six months. On a year-to-date basis, One 97 Communications stock has gained 34.98%.
One Mobiwik share price
The share price of One Mobiwik is trading flat in intra-day session. One Mobiwik shares have gained 6.13% in the past six months. On a year-to-date basis, the stock has declined 14.38%.