Shares of One97 Communications and MobiKwik declined on September 15, 2026, following a government update regarding UPI transaction charges. While the notification protects small payments up to ₹2,000 from fees, it creates a potential framework to charge for higher-value transactions. Investors are reacting to the uncertainty surrounding this future payment structure.
Shares of One97 Communications, the parent company of Paytm, and MobiKwik faced downward pressure on September 15, 2026, following a new notification from the Ministry of Finance. One97 Communications shares fell approximately 2.4% during intraday trade, while MobiKwik also saw a decline of about 1.5%. The market reaction comes a day after the government issued a notification under the Payment and Settlement Systems Act, clarifying the rules for digital payment charges.
Impact of the UPI Fee Framework
The central government has formally specified that Unified Payments Interface (UPI) transactions of up to ₹2,000, as well as RuPay debit card payments, must remain free of direct or indirect charges for both the payer and the receiver. This move effectively confirms that the majority of everyday consumer transactions will continue to operate under the current zero-fee structure.
However, the notification does not explicitly extend this protection to UPI transactions exceeding ₹2,000. By setting a formal floor, the government has created the potential scope for banks and payment providers to introduce a Merchant Discount Rate (MDR)—a fee charged to merchants for processing payments—on these larger transactions. Crucially, the government has not yet announced a specific rate, implementation timeline, or the mechanism for how these potential charges would be applied.
Why Investors Are Watching
For fintech companies like Paytm and MobiKwik, the digital payments ecosystem has historically operated under a zero-MDR environment. To generate revenue, these companies have instead focused on building business models around merchant subscriptions, payment-device rentals, financial services, and consumer lending.
Investors appear to be weighing the potential impact of a fee-based model on future revenue. A change could theoretically create a new revenue stream from payment processing, which has long been a challenge for the profitability of payment apps. However, the market is also accounting for significant uncertainties. It remains unclear how much the fees might be, whether merchants will resist paying them by shifting to other payment methods, and how the revenue will be split between banks, payment service providers, and other participants.
Risks and Future Monitoring
Until the UPI and Services Steering Committee, headed by the NPCI, provides a clear implementation framework, the financial impact remains speculative. The primary risk for shareholders is that the transition to any fee-based model could alter merchant behavior or demand, potentially offsetting any expected revenue gains. Additionally, the final decision on the revenue-sharing model between banks and fintech platforms will be a critical factor in determining whether this policy shift serves as a benefit or a hurdle for digital payment companies.
Investors are now tracking the next round of regulatory updates, specifically looking for the announcement of any MDR rates, the exact definition of eligible merchant categories, and the official timeline for when these rules might take effect.