The National Payments Corporation of India will roll out a Merchant Discount Rate on select UPI person-to-merchant payments following Diwali, having delayed the original October 15 launch to protect businesses during peak festive shopping. The framework charges 0.4% on direct account-to-merchant transactions above ₹2,000, capping fees at ₹300 for transfers reaching ₹75,000 or more. Furthermore, merchants earning up to ₹1 lakh monthly and consumers making peer-to-peer transfers will remain completely exempt from these charges.
Key points
Emkay Global Financial Services projects the new fees will generate ₹1,120 crore for Payt…: Emkay Global Financial Services projects the new fees will generate ₹1,120 crore for Paytm and ₹155 crore for Pine Labs by FY28.
The incoming policy is expected to affect approximately 4% of overall merchant transactio…: The incoming policy is expected to affect approximately 4% of overall merchant transaction volumes across the UPI network.
Payment processors stand to benefit structurally as unpredictable state incentives are re…: Payment processors stand to benefit structurally as unpredictable state incentives are replaced by stable, contractual commercial revenue.
Sources checked by our analysis pipeline: 1
With the Diwali festive period drawing to a close, attention is turning to the implementation of Merchant Discount Rate (MDR) charges on select person-to-merchant (P2M) Unified Payments Interface (UPI) transactions. The revised framework could mark a significant shift for India's digital payments industry, creating a recurring revenue stream for payment companies such as Paytm and Pine Labs.
The National Payments Corporation of India (NPCI) had initially scheduled the revised MDR framework to take effect from 15 October. However, it deferred the implementation to avoid introducing additional transaction costs for merchants during the festive season.
In a statement issued on 13 October, NPCI said the charges would be implemented immediately after Diwali, with the revised effective date to be notified separately. With the festive period now over, merchants and payment companies are awaiting clarity on the rollout.
While the revised implementation date is yet to be announced, brokerage firm Emkay Global Financial Services believes the introduction of MDR could make UPI acquiring a more commercially sustainable business by replacing discretionary incentives with a contractual and recurring revenue model.
Rising input expenses curtailed earnings growth for the Jockey and Speedo licensee during the second quarter, disappointing investors despite steady top-line expansion. The apparel manufacturer experienced a steep market sell-off that erased recent valuation gains. Management is now leaning on seasonal retail spending, premiumisation, and capacity additions to support operational momentum through the remainder of the fiscal year.
Market participants are monitoring the retailer as its equity experiences downward pressure during today's trading session. Clear drivers for the price decline currently remain unconfirmed in available financial disclosures. Investors await further clarity to understand the fundamental issues triggering the movement.
Early trading activity is highlighting divergent momentum across major corporate names as investors digest fresh global catalysts. Semiconductor giant Nvidia is facing downward pressure that has sent its valuation lower before the opening bell. Meanwhile, Eli Lilly is seeing positive buying sentiment driven directly by a newly granted regulatory clearance abroad.