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Paytm, Pine Labs: Jefferies, Goldman decode MDR impact on UPI payments
UPI MDR on Paytm and Pine Labs: Jefferies said that MDR on UPI comes ahead of estimates and is "higher than expectations" of 25bps, while Emkay Global believes that this development lifts the revenue pool for the industry.
Jefferies said that MDR on UPI comes ahead of estimates and is "higher than expectations" of 25bps, while Emkay Global believes that this development lifts the revenue pool for the industry.
Paytm and Pine Labs are set to benefit big from National Payments Corporation of India's (NPCI) move to introduce a 0.4 per cent Merchant Discount Rate (MDR) on P2M transactions above ₹2,000, starting October 15, 2016, said brokerages.
Jefferies said that MDR on UPI comes ahead of estimates and is "higher than expectations" of 25bps, while Emkay Global believes that this development lifts the revenue pool for the industry and will make the payment business structurally self-sustaining and also the business model much more resilient.
"Industry revenue opportunity can be ₹150-180 billion, and participants will share across issuer, app, acquirer and banks," Jefferies said in its report.
Distribution of the 40bps MDR: According to Emkay Global, issuing bank (16bps), acquiring bank (12bps), Payer TPAP (8bps), and Payer PSP bank (consumer handle, 4bps). While the issuing bank keeps the major part of the MDR, acquirers like Paytm and Pine Labs would keep the share of 12bps of the acquiring bank.