Paytm Shares Tumble Nearly 10% After Government Denies MDR Revival Rumours.
Shares of One 97 Communications, the parent company of Paytm, slumped by almost 10% on Thursday after the Finance Ministry dismissed speculation about the possible reintroduction of Merchant Discount Rate (MDR) charges on UPI transactions.
By 10:19 AM, Paytm’s stock had dropped 5.27% to ₹909.85 on the Bombay Stock Exchange (BSE), having earlier hit an intra-day low of ₹864.20. The decline followed a government clarification refuting online reports that suggested large-ticket UPI payments might soon attract MDR fees.
What Is MDR?
MDR is a transaction fee that merchants pay to banks or payment service providers like Paytm for processing digital payments. The government eliminated MDR on UPI and RuPay transactions to promote digital adoption and reduce cash usage. However, recent reports had hinted at a potential comeback of MDR on high-value UPI payments.
Government Reacts to Speculation
Calling the reports “baseless and sensational,” the Finance Ministry issued a strong rebuttal, warning that such misinformation fosters “unnecessary uncertainty, fear, and suspicion” among users and businesses alike.
Earlier this year, the Payments Council of India — representing various digital payment companies — had written to Prime Minister Narendra Modi, proposing a nominal MDR on high-value UPI transactions to improve the financial sustainability of payment providers. The Council recommended a 0.3% fee for large merchants, but the government has yet to act on the suggestion.
Thursday’s official statement made it clear: there are no current plans to reintroduce MDR on UPI transactions.
Impact on Paytm and the Broader Market
Paytm, which has faced growing competition from PhonePe and Google Pay, reacted sharply to the government’s clarification, reflecting investor nervousness about policy volatility in the fintech space.
Despite the stock market volatility, UPI continues to scale new highs. In May 2025, the platform processed 18.68 billion transactions worth ₹25.14 lakh crore — a 33% year-on-year jump in volume. On average, over 602 million transactions worth ₹81,106 crore were processed daily.
India now leads the world in real-time payments, accounting for 48.5% of all global transactions, reinforcing its dominance in the digital payment landscape.
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