New MDR norms for UPI to add more revenue, bottom line to business: Paytm CEO

The introduction of Merchant Discount Rate (MDR) on large-value UPI transactions will add more revenue and profit to the company, Paytm parent One97 Communications founder and CEO Vijay Shekhar Sharma said on Wednesday.

The government has introduced a 0.4% fee on UPI transfers exceeding Rs 2,000 to merchants from October 15, while explicitly ring-fencing everyday person-to-person transactions as well as small payments from any charge.

"The Government of India just gave a gadget notification yesterday that would add more revenue and bottom line to our business, which we are committed to and are happy with and that will bring even more profitability and even more investment in merchant acquisition. In fact, it will give us an edge and lead ahead of competition," Sharma said.


From October 15, a 0.4% Merchant Discount Rate (MDR) will be levied on person-to-merchant (P2M) transactions worth more than Rs 2,000 through UPI (Unified Payments Interface), capped at Rs 300 for payments of Rs 75,000 and above.

"The inflexion point in UPI is continuously growing, double the market growth. We are taking market share from our competition. I remain committed and fully sure of winning back the same market share that we had way back in 2023-2024," Sharma said.

Speaking at the 26th Annual General Meeting, he said the Fintech business has matured in the last 10 years and it is time for the company to start generating free cash flow from the business and invest in future growth.

He said that the financial year 2026 was when the company posted profit for the first full fiscal year.

Sharma said the company is developing its own artificial intelligence, which will give it an edge in the sector.

"The best part is that we as a technology company have this as a native capability. We don't need to buy AI from outside. We don't need a foundation model. We are leveraging our own capabilities that exist in our own company. In fact, we have created a business model and services that are currently being tested in the company and we are piloting with some of our enterprise or business customers," he said.

He said AI offers a once-in-a-lifetime opportunity for the country.

"We at Paytm are committed to driving the success and the ability of our delivering a fintech revolution in the country to extend it into the AI revolution in the country," he said.

Sharma said that Paytm has been expanding internationally.

"I will not hurry up and we will not put an over-large amount of money in the international market till the time period. We believe that our own internal accruals, while our profitable growth continues, the internal accruals will be able to fund our operations in AI and in international markets," he said.

Talking about dividends, Sharma said that the company is in a growth phase and is not planning dividend allocation in the near term. PTI