NEW DELHI: Paytm on Thursday tumbled as much as 10% on Thursday hitting an intraday low of Rs 864.40 on BSE Sensex, after the finance ministry clarified that there are no plans to introduce a Merchant Discount Rate (MDR) on UPI transactions.As of 10 am, Paytm was trading 6% lower, underperforming the broader NSE Nifty 50, which was down just 0.14%. This marks Paytm's steepest single-day drop since February 2024, as investor sentiment took a hit following the official denial.The sharp fall in the stock price of One 97 Communications, Paytm’s parent company, came after the finance ministry on Wednesday clarified that reports suggesting MDR charges on UPI payments were "false, baseless, and misleading.""Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading. Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens. The Government remains fully committed to promoting digital payments via UPI," Finance ministry wrote on X.The clarification came after some media reports suggested the government was considering levying MDR on UPI transactions only for large merchants to support banks and payment providers.
Earlier in March, the Payments Council of India (PCI), which represents over 180 digital payment firms, urged the government to reconsider the introduction of merchant discount rate (MDR) on UPI transactions and RuPay debit cards. The industry body has sought an MDR of 0.3% on UPI transactions only for large merchants and a nominal MDR on RuPay debit cards for all merchants. The council warned that without MDR, the digital payments infrastructure could become unsustainable, affecting innovation, cybersecurity, and customer support.PCI argued that the policy, in place since January 2020, has put pressure on the payment ecosystem, despite a Rs 1,500 crore government incentive that falls far short of the estimated Rs 10,000 crore needed annually. Members of PCI include major players like Amazon Pay, PhonePe, Paytm, and Razorpay.
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