NPCI SAYS UPI MDR SHALL BE IMPLEMENTED AFTER DIWALI

Shares of fintech companies, including Paytm, Pine Labs and One Mobikwik Systems, recovered from their intraday lows after the National Payments Corporation of India announced that the proposed merchant discount rate on select UPI transactions would be implemented immediately after Diwali. Paytm shares had declined as much as 6.5% following the announcement that the rollout of MDR on UPI transactions had been deferred. Pine Labs and One Mobikwik Systems also fell around 4% during the session. However, the stocks pared their losses as trading progressed. Paytm was trading 1.4% lower, while Pine Labs had moved into positive territory. One Mobikwik Systems was down nearly 3%. In a statement, NPCI said the UPI and Services Steering Committee had decided to defer the implementation of MDR on select person-to-merchant UPI transactions until after the festive season. The revised implementation date will be announced separately. According to an NPCI circular issued last month, an MDR of 0.4% will apply to eligible P2M UPI transactions exceeding Rs 2,000. Payments between individuals and the vast majority of routine merchant transactions will continue to remain free. Certain essential service categories, including railways, telecommunications, fuel and insurance, will instead attract a flat fee of Rs 5 per transaction for payments above Rs 2,000. NPCI Managing Director and CEO Dilip Asbe had said last month that only around 10% of the total value of UPI transactions could face the risk of charges being passed on to consumers under the proposed MDR framework. He added that large corporate merchants, many of which already accept credit cards, were expected to absorb most of the additional costs.