Business Standard ·
Economy, business and finance
Paytm, Mobikwik rally up to 7% as NPCI levies charge on UPI transactions
Paytm shares rallied 7 per cent to a fresh 52-week high of ₹1,856.50 on the BSE. Mobikwik stock rose by 6 per cent to ₹214. However, Pine Labs slumped 6 per cent to ₹182 per share.
Digital payments platforms like Paytm and Mobikwik saw a sharp rally of up to 7 per cent in intraday deals on Wednesday, as the introduction of a merchant discount rate (MDR) on UPI transactions is seen as making the payment business structurally self-sustaining and resilient.
Paytm shares rallied 7 per cent to a fresh 52-week high of ₹1,856.50 on the BSE. Mobikwik stock rose by 6 per cent to ₹214. However, Pine Labs slumped 9 per cent to ₹175.40 per share. Both Paytm and Mobikwik pared gains as the session progressed. As of 12.30 PM, Paytm was up 1.24 per cent at at ₹1752.60 on the BSE. Mobikwik was trading 2.13 per cent lower at ₹197.65.
Effective from October 15, the National Payments Corporation of India (NPCI), which operates UPI, said a MDR of 0.4 per cent would apply to person-to-merchant UPI transactions above ₹2,000. The fee will be capped at ₹300 for transactions of ₹75,000 or more.
Person-to-merchant (P2M) transactions up to ₹2,000 will remain free of MDR. Peer-to-peer (P2P) transactions, such as transfers between family and friends, will also remain free.
Payments to small vendors, classified as P2PM, will also remain free of any MDR. P2PM merchants are small vendors receiving up to ₹1 lakh a month through UPI, a category that particularly benefits businesses in rural and semi-urban areas. READ MORE
Jefferies said the levy is higher than expectation of 25 bps and lifts revenue pool for industry to help expand the market and drive growth.