Paytm projects revenue boost from new UPI merchant fee structure
Paytm anticipates an annual EBITDA increase of roughly 700 million rupees following the introduction of a 0.4 percent merchant discount rate on UPI transactions over 2,000 rupees.
Fintech firm Paytm expects to improve its payment processing margins by at least 2.5 basis points as a result of the National Payments Corporation of India (NPCI) mandating a 0.4% Merchant Discount Rate (MDR) on UPI payments exceeding 2,000 rupees. CFO Madhur Deora stated that, based on current transaction volumes, this shift could contribute approximately 700 million rupees in incremental EBITDA.
CEO Vijay Shekhar Sharma has set a goal to secure a one-third share of the UPI consumer payments market. Currently, Paytm holds an 8.1% share of transaction volumes, trailing significantly behind competitors PhonePe and Google Pay. Sharma indicated that the company plans to achieve this growth through product-led strategies rather than heavy reliance on cashback incentives.
Beyond payment processing, Paytm has transitioned its consumer lending business to an asset-light, partner-led distribution model to optimize capital availability without balance sheet risk. The company is also developing an AI platform for small merchants, with expectations that the service will generate meaningful revenue within the next year. The new MDR framework is scheduled for implementation on December 8.