Shares of Paytm-parent One97 Communications, CMS Info Systems, One Mobikwik, Yes Bank, and others are surging in trade after India's Unified Payments Interface (UPI) announced that it is set for its first broad-based merchant discount rate (MDR) framework from October 15, 2026.
The introduction of MDR on select UPI payments is emerging as a potentially meaningful monetisation opportunity for banks and payment companies, with brokerages estimating an annual industry revenue pool of Rs 10,000 crore to Rs 20,600 crore.
Among UPI payment apps, Paytm shares rose as much as 7.25% to Rs 1,855.50 apiece in early trade, CMS Info Systems rose as much as 7.22% to Rs 239 apiece, and One Mobiwik rose 6.54% to Rs 213.99. Meanwhile, UPI-heavy banks also jumped in early trade, with Yes Bank emerging as the biggest beneficiary, rsising as much as 4.46%, followed by SBI, which rose 1.45%.
The National Payments Corporation of India has set a 0.4% MDR on person-to-merchant UPI transactions above Rs 2,000 from October 15, with the charge capped at Rs 300 for payments of Rs 75,000 and above. The fee will be paid by merchants rather than consumers.
UBS estimates a Rs 10,000–15,000 crore annual revenue pool for banks and payment players. It expects banks to retain about 60–70%, with the remainder accruing to payment companies. Morgan Stanley has a more aggressive estimate for the earnings impact on the fintechs. It expects Paytm's EBITDA estimates to potentially rise 38-48% for FY28/FY29, while Pine Labs' adjusted EBITDA could increase 24-29%.
Goldman Sachs estimates a substantially larger Rs 20,600 crore potential industry revenue pool, based on its calculation that about half of overall UPI transaction value could attract the full 40-basis-point MDR. JPMorgan puts the maximum pool at around Rs 17,000 crore, including roughly Rs 11,700 crore for issuing and acquiring banks, equivalent to about 2.1% of FY26 net profit for listed commercial banks.
Citi estimates Rs 16,000-17,000 crore of annual ecosystem revenue, with roughly 60% going to banks, 25% to UPI application providers and 15% to non-bank payment aggregators. It identifies YES Bank as a standout beneficiary given its UPI-linked volumes.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.