Paytm shares fall over 3% as government bars UPI charges on transactions up to ₹2,000

Shares of One97 Communications, the parent of payment system provider Paytm, fell as much as 3.29% to an intraday low of ₹1,748 after the government directed banks and payments services provider not to levy charges on Unified Payments Interface (UPI) transactions of up to ₹2,000 or on payments made through RuPay debit cards.

However, the government has not specified whether charges would be applicable to transactions above ₹2,000, to be paid by merchants. So far, there has been no charge on UPI transactions, irrespective of the amount.

As per a gazette notification dated September 14, no bank or system provider would impose, whether directly or indirectly, any charge on a person making or receiving a payment through RuPay debit card or UPI transaction of up to ₹2,000.

The notification follows an amendment to section 10 A of the Payment and Settlement Systems Act, 2007, which provides an enabling framework for imposing a Merchant Discount Rate (MDR) on payments through UPI and other notified electronic payment modes.

The amendment Bill was passed by Parliament during the Monsoon Session, which concluded on August 13, 2026. Following the passage of the Bill, the government had said the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), would decide on the MDR rates.

Explaining the rationale for imposing charges, the government, in a statement, said, with exponential transaction volumes, the system requires significant and continuous upgrades in cybersecurity, fraud prevention, and infrastructure.

Charges were required for market expansion and self sustainability, it had said. It is necessary to increase competition by encouraging more companies to expand their operations, which requires a self-sustaining revenue model, it had said.

UPI is operated by the National Payments Corporation of India (NPCI), an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association.

It runs real-time payments between individuals nd enables customers to make payments directly to merchants while making purchases. As far as overseas presence is concerned, UPI is now accepted in 11 countries, with Uzbekistan being the latest entry.

UPI, launched on August 25, 2016, has transformed India's digital payments landscape, with transaction value surging from ₹0.07 lakh crore in FY17 to around ₹314 lakh crore in FY26, a more than 4,000-fold increase over the decade.

As of 2:07 pm, Paytn shares traded 3.22% lower at ₹1,749, underperforming the NIFTY Midcap 50 index which was down 1.3%.