Shares of major digital payment companies came under pressure on Thursday, October 8, after reports suggested that the planned rollout of Merchant Discount Rate (MDR) on select UPI transactions could be delayed. 

Paytm parent One 97 Communications fell as much as 10% to Rs 1,560.60 on the BSE, while MobiKwik dropped over 8% and Pine Labs declined more than 4%.

The proposed MDR framework was scheduled to take effect from October 15. Under the plan, a 0.4% MDR would apply to eligible person-to-merchant UPI transactions above Rs 2,000, with the charge capped at Rs 300 for transactions of Rs 75,000 and above. Person-to-person transactions would remain free.

However, traders, merchant associations and payment industry players have reportedly sought more time before the new system is introduced. Sources cited by multiple reports said the National Payments Corporation of India (NPCI) is considering postponing the rollout until January 2027. A final decision has not yet been announced.

The possible delay has raised concerns among investors because payment companies had expected the new MDR structure to create a fresh revenue stream. Brokerage estimates had also factored the proposed fee structure into earnings expectations for companies such as Paytm and Pine Labs.

The timing of the rollout has become a key issue because the October-December period is India’s major festive shopping season. Merchant groups have argued that introducing a new transaction cost during this period could increase pressure on retailers and smaller businesses. The proposed delay would give banks, merchants and payment companies additional time to prepare their systems.

The government has clarified that MDR would not be charged to customers. UPI payments between individuals will remain free, while around 96% of merchant transactions are expected to remain unaffected under the current framework.

With the final decision still pending, investors will closely track NPCI’s announcement. For Paytm, MobiKwik and Pine Labs, the timing and final structure of MDR could remain an important near-term trigger for their share prices and earnings outlook.

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