Paytm is set to boost its revenue by Rs 214 crore in the financial year 2027 following the introduction of a 0.4% Merchant Discount Rate (MDR) on eligible person-to-merchant (P2M) UPI transactions above Rs 2,000, effective from October 15. The MDR will have a cap of Rs 300 and concessional rates for certain sectors, marking a shift from previously free transactions, according to bfsi.economictimes.indiatimes.com.
The new MDR framework applies to large-ticket UPI transactions, and Paytm expects to generate additional income from its merchant business as a result. However, the company noted that the ultimate benefits will depend on how the MDR revenue is shared, including potential discounts offered back to large merchants. Paytm has committed to making further disclosures once the framework is fully implemented and its impact is clear, as reported by livemint.com.
This development comes amid growing competition in the UPI payments space, where platforms are seeking to capture a larger share of high-value transactions. The MDR introduction aligns with regulatory efforts to standardize charges across digital payment platforms. Paytm's anticipated revenue increase underscores the financial implications of MDR policies for payment service providers and their merchant partners.
The MDR rule will take effect on October 15, 2026, with Paytm expected to report detailed financial impacts in its upcoming disclosures, providing a clearer picture of how the new charges influence its merchant revenue streams.