Paytm, Pine Labs, Mobikwik shares crash up to 7% as UPI MPR fee rollout delayed beyond Diwali

Shares of Paytm parent One 97 Communications and Pine Labs crashed up to 7% on Tuesday afternoon after the implementation of the merchant discount rate (MDR) on select Unified Payments Interface (UPI) transactions was pushed beyond Diwali, missing the key festive season that analysts had expected to boost earnings of the fintech platforms with the new fees.

Paytm shares plunged more than 7% to hit an intraday low of Rs 1,571 apiece while those of Pine Labs dropped more than 5% to their day’s low at Rs 154.42 apiece on Tuesday. Mobikwik shares meanwhile dropped 4%.

UPI MDR fee rollout delayed beyond Diwali


The National Payments Corporation of India (NPCI) said in a statement on Tuesday that the introduction of the MDR fees on select UPI payments was pushed beyond Diwali and a final date will be communicated soon to stakeholders. Earlier, the new fee structure was scheduled to take effect from October 15 onwards.

Also read | UPI MDR rollout deferred beyond Diwali

The NPCI last month announced a Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions above Rs 2,000. The reported delay in the introduction of the fee till next year would keep UPI payments free for merchants through the entire festival season till after Diwali, amid pushback from retail traders’ associations.

Why Paytm, Pine Labs shares are crashing?

Paytm and Pine Labs were seen as the biggest beneficiaries in the MDR regime, positioned to capture the larger absolute opportunity. However, trade bodies have been pushing against the additional fees that would alter India’s long stance of free UPI payments. The All India Consumer Products Distributors Federation (AICPDF) and the All India Mobile Retailers Association (AIMRA) sought deferment of the proposed MDR in view of the upcoming festive season and heightened business activity, besides a review of the Rs 1 lakh threshold, which they want increased to Rs 5 lakh. They have also sought that merchant-to-merchant transactions be kept outside the MDR regime, stating such transactions are an important part of the trading ecosystem.

Also read | UPI MDR bonanza: Why Paytm may win bigger, but Pine Labs could gain faster

The trade bodies earlier called for a ‘New UPI Day’ on October 2, but withdrew the protest after meeting Finance Minister Nirmala Sitharaman. "In view of the constructive discussions and the assurance that the concerns raised by the trading community will receive due consideration, the All India Consumer Products Distributors Federation (AICPDF) and the All India Mobile Retailers Association (AIMRA) have decided to withdraw the protest call," Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT), said after the meeting.

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