On Tuesday, October 13, shares of Paytm, One Mobikwik and Pine Labs fell up to 7% during intraday trading after the National Payments Corporation of India (NPCI) announced that the implementation of the 0.4% Merchant Discount Rate (MDR) on select Person‑to‑Merchant (P2M) UPI transactions would be deferred until Diwali 2026. The decision, made by the UPI and Services Steering Committee, was justified on the basis of the upcoming festive season, during which large purchases are expected. The deferment means the fee, which was to apply to P2M transactions above ₹2,000, will now be imposed after Diwali, Sunday, November 8, 2026, with the exact date to be notified separately.

The news triggered a sharp sell‑off, with trading volumes exceeding 6.7 million equity shares across the NSE and BSE. Paytm shares dropped 7.04% to an intraday low of ₹1,571 from the previous close of ₹1,690, while Pine Labs fell 5.1% to ₹154.42 and One Mobikwik slid 4.2% to ₹230.41. The decline reflected investors’ concerns that the deferment would curtail the high‑volume transaction revenue that these platforms were expecting during the festive period.

Paytm had previously indicated that the 0.4% fee would generate additional revenue from its merchant business for transactions above ₹2,000, a figure that had been factored into its financial projections. With the implementation postponed, the company and its peers will miss out on the anticipated surge in transaction volume and the associated fee income that would have been realised during the Diwali shopping season. This development has dampened investor sentiment towards the sector’s earnings outlook.

After reaching the intraday low, Paytm shares recovered slightly, trading 0.18% lower at ₹1,688 as of 2:17 pm IST. Pine Labs and One Mobikwik also rebounded after a brief dip, stabilising near their pre‑announcement levels. The temporary recovery suggests that while the deferment has impacted short‑term pricing, the broader market view remains cautiously optimistic about the long‑term prospects of digital payment platforms.

The original MDR framework, set to take effect on October 15, stipulated a 0.4% fee on P2M UPI transactions above ₹2,000, capped at ₹300 for payments of ₹75,000 and above. Merchants in critical sectors such as railways, telecom, insurance, fuel and agricultural inputs were to pay a flat ₹5 per transaction above ₹2,000, while government utility bill collections and educational fee payments above ₹2,000 would incur the same flat fee. Brokerage firms and mutual funds were to pay a 0.02% MDR capped at ₹300 per transaction.

The deferment decision is expected to ease concerns among merchants who were apprehensive about high MDR charges during the festive season, but it also limits revenue potential for UPI payment platforms. NPCI has stated that it will announce the exact implementation date in a separate communication. Investors will be watching subsequent disclosures closely to gauge the impact on merchant and platform earnings in the coming months.