One 97 Communications, operating as Paytm, has announced the introduction of a Merchant Discount Rate (MDR) of up to 0.4% on UPI Person-to-Merchant (P2M) transactions exceeding ₹2,000. This change, effective from October 15, 2026, is a result of a circular issued by the National Payments Corporation of India (NPCI). While customers will continue to transact for free, merchants will now incur charges on these specific transactions, potentially boosting revenue for Paytm’s merchant services.
New Merchant Fees on UPI Transactions
One 97 Communications Limited (Paytm) has disclosed the implementation of a Merchant Discount Rate (MDR) on specific UPI Person-to-Merchant (P2M) transactions. This initiative, driven by a circular from the National Payments Corporation of India (NPCI), will apply to all P2M transactions valued at over ₹2,000. The new MDR will be set at a maximum of 0.4%.
Effective Date and Customer Impact
The NPCI Circular mandating this change is dated September 15, 2026, and the MDR will come into effect on October 15, 2026. Crucially, the announcement clarifies that UPI payments will remain free for end-users or customers. This means customers will not bear any additional charges for making payments through UPI. The impact of these charges will be borne by the merchants.
Potential Revenue Boost
This development is expected to generate additional revenue for Paytm from its merchant business, particularly on payment transactions that were previously processed without any charge. The company stated that it will provide further disclosures if required once the circular is effective and the full impact of the MDR is ascertained. The disclosure will also be available on the company’s investor relations website.
Source: BSE
