Paytm wins, but ATM also wins! Why CMS Info Systems shares jumped 7% on UPI MDR

Shares of CMS Info Systems gained as much as 7% to their day’s high of Rs 239 on the BSE on Wednesday after becoming a potential direct beneficiary of the government’s decision to announce the first-ever Merchant Discount Rate (MDR) on select UPI transactions above Rs 2,000.

The government will introduce MDR on some Person-to-Merchant (P2M) UPI transactions from October 15 onwards, with merchants paying 0.4% on transactions above Rs 2,000, the National Payments Corporation of India (NPCI) announced on Tuesday. A maximum fee of Rs 300 can be levied on such transactions of Rs 75,000 or more.

CMS Info Systems is one of India’s largest cash management and business services companies, offering physical logistics, banking automation and AI-driven technology solutions.

How is CMS Infosystems a beneficiary?

The positive read-through for CMS Info Systems is mainly through a potential shift back towards cash for higher-value merchant transactions.

With a 0.4% MDR on UPI P2M transactions above Rs 2,000 from October 15, higher-value digital payments will no longer be completely free for merchants. This could make cash payments relatively more attractive for some merchants, particularly where transaction values are high and margins are thin.

That could benefit CMS because its core business includes cash logistics, ATM cash management, retail cash management and cash-in-transit services.

CMS Infosystems Q1 results

Cash logistics major CMS Info Systems reported a 10.6% year-on-year decline in consolidated profit after tax (PAT) to Rs 83.7 crore in the first quarter of FY27, compared with Rs 93.6 crore in the same quarter a year ago.

Consolidated revenue, however, rose 1.2% year-on-year to Rs 634.7 crore in Q1 FY27 from Rs 627.4 crore in Q1 FY26. EBITDA increased 6.9% year-on-year to Rs 168.8 crore from Rs 157.9 crore, while the EBITDA margin improved to 26.6% in Q1 FY27 from 25.2% in the year-ago quarter.

CMS Info shares have had a rough 2026, down 19% in the last six months and a massive 35% since the beginning of the year. In the last one year, the stock is down 45%.

RBI supports MDR charges

The Reserve Bank of India (RBI) backed the introduction of Merchant Discount Rate (MDR) on large-value UPI transactions, saying the move will help strengthen the long-term sustainability of India's digital payments ecosystem. In a post on X, the central bank said the move would enable UPI to continue scaling, innovating and serving consumers and businesses across the country.

For nearly seven years, UPI became more and more popular as a transaction could be made so quickly without paying any additional charges. The government has however repeatedly clarified that UPI will remain free for citizens and person-to-person transactions will continue without charges.

While discussing the costs of digital-payment infrastructure, RBI Governor Sanjay Malhotra in August said, “Someone has to pay the cost”. He stressed that the RBI wants digital payments to remain accessible, affordable and safe, but also sustainable.

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