Shares of Indian cash management majors and other ATM-related stocks including CMS Info Systems Ltd. and Radiant Cash Management Services Ltd. rallied up to 10% on Wednesday.
The surge came after the government introduced a Merchant Discount Rate (MDR) on select UPI payments.
CMS Info Systems jumped as high as 7.22% to Rs 239 apiece, while Radiant Cash Management soared 10.03% to a high of Rs 39.49.
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The stocks later pared a lot of gains, with CMS Info up 4.6% to Rs 233.24, and Radiant Cash Management trading over 5% higher at Rs 37.75 apiece on the NSE as of 1:15 p.m.
The introduction of a Merchant Discount Rate (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.
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. The scale of the opportunity, however, will depend on how the MDR is eventually distributed across the UPI ecosystem.
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