Paytm Shares Drop Nearly 10% After Government Refutes MDR Waiver Speculation

Paytm Shares Sink Nearly 10% as Government Refutes MDR Fee Rumours.

Shares of One 97 Communications, the parent firm of Paytm, dropped sharply on Thursday after the Finance Ministry dismissed speculation regarding the return of Merchant Discount Rate (MDR) fees on UPI transactions.

The stock fell as much as 9.8% to an intra-day low of ₹864.20 on the BSE before recovering slightly to trade over 5% lower at ₹909.85 around 10:19 AM. The slump followed reports suggesting MDR charges could be reintroduced for high-value UPI transactions — reports the government called “baseless and sensational.”

What Triggered the Fall?
MDR is the fee paid by merchants to banks or payment service providers for processing digital transactions. It was scrapped for UPI and RuPay transactions to encourage cashless payments. However, some recent reports hinted at the possible reintroduction of this fee, sparking market jitters.

In a strongly worded statement, the Finance Ministry said such misinformation leads to “unnecessary uncertainty, fear, and suspicion” among users and businesses.

Industry Proposal, No Policy Change
Earlier this year, the Payments Council of India suggested a nominal MDR — around 0.3% — on large-ticket UPI transactions to sustain the digital payments ecosystem. While the idea remains under discussion, the government has made it clear: no such decision has been made.

UPI Growth Remains Strong
Despite the stock reaction, India’s UPI ecosystem continues to thrive. In May 2025 alone, UPI processed 18.68 billion transactions worth ₹25.14 lakh crore — a 33% jump in volume year-on-year. India now accounts for nearly half of global real-time payments.

Paytm, though still a key player, faces stiff competition from rivals like PhonePe and Google Pay, which dominate UPI market share.