Shares of digital payments companies One Mobikwik Systems and One 97 Communications, the parent company of Paytm, remained in focus during Wednesday’s trading session after the National Payments Corporation of India (NPCI) announced a new merchant discount rate (MDR) framework for select UPI transactions.
As of 10:26 am on Wednesday, One Mobikwik Systems was trading 1.19% lower at ₹198.46, while One 97 Communications was 0.42% higher at ₹1,737.20.
Both stocks had witnessed sharp gains in early trade before giving up a significant portion of their advances.
MobiKwik, Paytm Pare Early Gains
One Mobikwik Systems had gained as much as 4.71% in early trading before slipping into negative territory.
Paytm’s parent company One 97 Communications had risen as much as 4.62% before paring most of its gains.
The movement came a day after NPCI announced changes to the MDR framework applicable to certain UPI transactions.
New UPI MDR Framework from October 15
Under the new framework, an MDR of up to 0.4% will apply to select person-to-merchant (P2M) UPI transactions above ₹2,000 from October 15.
The framework also includes concessional rates for certain categories and exemptions for small merchants and eligible transactions.
MDR is the fee paid by a merchant or payment ecosystem participant for processing a digital payment. Changes in MDR can influence the revenue-sharing structure among banks, payment service providers and other participants in the payments ecosystem.
Paytm clarified that customers will continue to be able to make UPI payments without being charged.
“As per the NPCI Circular, no charge is levied on customers for UPI payments, which shall continue to remain free of charge for them,” Paytm said.
JM Financial’s View on Paytm
Brokerage firm JM Financial said the proposed MDR of 40 basis points was materially higher than the 25 basis points it had previously modelled.
However, the brokerage noted that broader exemptions led it to reduce its assumption for eligible gross merchandise value (GMV) from 30% to 20%.
“Retaining our 20% share assumption for Paytm, pass-through rises to 8bps (from 5bps),” JM Financial said.
A basis point is equal to one-hundredth of a percentage point. Therefore, 40 basis points represent 0.4%.
Market Focus Remains on Revenue Impact
Investors are likely to assess how the new MDR structure affects payment companies’ transaction revenue, merchant economics and revenue-sharing arrangements.
While the framework may create a potential monetisation opportunity for certain UPI transactions, the actual impact on individual companies will depend on the categories covered, exemptions, transaction volumes and the share of eligible GMV.
