New UPI charges can boost merchant revenue: Paytm

New framework applies to select merchant transactions above Rs 2,000 from October 15, 2026.

Chandigarh, September 16

Paytm on Tuesday announced the new Merchant Discount Rate (MDR) of up to 0.4 percent on select UPI Person-to-Merchant transactions above Rs 2,000 will generate additional revenue from its merchant business. Introduced by the National Payments Corporation of India (NPCI), the revised charges would come into effect from October 15, 2026.

In an exchange filing, Paytm said several merchant transactions previously processed without an MDR will now contribute to its revenue. “This will generate additional revenue from the merchant business for many of the payment transactions that were free earlier,” the company said.

Paytm clarified that the revised framework will not impose any charges on customers making UPI payments. It said UPI payments for customers will continue to remain free.

The NPCI circular, issued on September 15, 2026, stated that the MDR will apply to eligible Person-to-Merchant transactions, Person-to-Person transactions and Person-to-Merchant transactions below Rs 2,000 will also remain free for users. Transactions below Rs 2,000 will continue to remain free for eligible merchants.

The Reserve Bank of India said introducing MDR on large-value UPI transactions was intended to support the long-term sustainability of the digital payments ecosystem. It added that an appropriate distribution of MDR among ecosystem participants can support investment in technology, payment infrastructure and merchant acceptance networks.

Paytm said it will assess the impact of the new framework after implementation. The company added that it will make further disclosures, if required, once the NPCI circular became effective and its impact was ascertained.