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One 97 Communications, Paytm’s listed operator, closed 5.42% lower at ₹1,640 on October 8, 2026, after reports that the planned UPI merchant discount rate (MDR) could be deferred from October 15 to January 1, 2027. The January date was reported as a possible proposal, not a formally confirmed change. The report provides market context, but does not establish that the fee timing alone caused the share decline.
Why did Paytm shares fall?
Business Standard reported that One 97 Communications shares fell as much as 10% intraday on October 8 before closing 5.42% lower at ₹1,640. The move came amid reports that UPI merchant MDR, which had been announced to start on October 15, might instead begin on January 1, 2027. The reported rationale for a delay was to keep UPI payments free for merchants through the festive season amid pushback from retail traders’ associations. Business Standard’s October 8 report did not establish a formal policy revision or prove that the report was the sole cause of the stock move.
Has UPI merchant MDR officially been delayed?
The January 1, 2027 date was reported as a possible deferral. The contemporaneous reporting reviewed did not confirm that the government or another relevant authority had formally changed the announced start date. The Ministry of Finance’s September 15 explanation describes the announced framework; it should not be read as confirmation that a later effective date was adopted. Readers and merchants should distinguish a reported proposal from an official notice.
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The Ministry of Finance’s September 15, 2026 explanation sets out different treatment by transaction type, amount and merchant category. MDR is a charge within the merchant-payment ecosystem, shared among participants such as banks, payment service providers and UPI application providers. The Ministry says it is not a charge on customers and that banks have been advised not to pass it on to them. The Ministry’s release describes these terms:
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| Transaction or merchant category | Announced MDR treatment |
|---|---|
| Person-to-person (P2P) UPI payments | Free, regardless of transfer amount. |
| Person-to-merchant (P2M) payments of ₹2,000 or less | No MDR. |
| Qualifying small merchants in the P2PM category receiving up to ₹1 lakh per month through UPI QR | Zero MDR on all transactions. |
| Specified P2M transactions above ₹2,000 | 0.4% MDR; for transactions of ₹75,000 or more, the charge is capped at ₹300 per transaction. |
| Transactions above ₹2,000 in listed essential and thin-margin sectors, including railways, telecommunications, insurance, fuel and agricultural inputs | Flat ₹5 MDR per transaction. |
| Listed capital-market transactions involving mutual funds, securities, stockbrokers and dealers | 0.02% MDR, capped at ₹300 per transaction. |
The Ministry estimated that about 96% of P2M transactions would remain unaffected and that MDR would apply to about 4% of merchant transactions. Those are estimates in the September 15 government explanation, not a statement that every merchant or transaction will face the same rate.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What could a delay mean for Paytm?
If the announced fees take effect later than planned, revenue associated with qualifying transactions could be postponed for participants across the payment ecosystem. The reporting reviewed does not quantify the effect on Paytm’s earnings, so the reported delay should not be translated into a specific Paytm revenue or profit forecast.
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Paytm has described merchant payments as a core business, while its September 15 AGM recap says founder and CEO Vijay Shekhar Sharma characterized the company as profitable without merchant fees or MDR. Sharma said: “We have built this business on a zero base. Even if there is no MDR, no merchant discount rate, no fees on merchants, and no grant or support from any regulatory body or government, our business will remain profitable in the foreseeable future.” This is management’s view, reproduced in Paytm’s company-published AGM recap, not an independent assessment of the policy’s financial effect.
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