Paytm shares dip after govt denies MDR on UPI transactions

However, the stock recovered some of its losses during the intra-day trade and was seen trading at Rs 906.75, still down by Rs 53.70 or 5.59 per cent on the BSE.

The sharp fall came after the Finance Ministry strongly denied reports that the government was planning to reintroduce a merchant discount rate (MDR) on UPI payments.

MDR is a fee that banks or payment service providers like Paytm charge merchants for processing digital payments.

Currently, the government has waived MDR charges on UPI transactions to promote digital payments.

However, some media reports claimed that the government was considering imposing MDR on high-value UPI transactions. These reports caused panic among investors.

In response, the Finance Ministry issued a strongly-worded statement, calling these claims ‘baseless and sensational.’

The ministry said such rumours create fear and confusion among people and are not true.

Earlier in March, the Payments Council of India, which represents companies involved in digital payments, had written to Prime Minister Narendra Modi.

The industry body had requested the government to bring back MDR on UPI and RuPay debit card transactions.

It had suggested a 0.3 per cent MDR on large merchants using UPI and a small fee on all RuPay debit card transactions.

However, no such decision has been taken by the government so far. Currently, the UPI space is dominated by PhonePe and Google Pay, which together hold more than 80 per cent of the market.

In May, UPI hit a new milestone by processing 18.68 billion transactions worth Rs 25.14 lakh crore.

This was higher than April, when UPI transactions totalled Rs 23.95 lakh crore. Compared to last year, there was a 33 per cent rise in the number of UPI transactions.

On average, UPI handled daily transactions worth Rs 81,106 crore and around 602 million in volume during May.