Paytm Share Price Plunges 10% as FinMin Dismisses UPI MDR Report

Paytm’s Share Price took a major hit on June 12, 2025. The price dropped nearly 10% in a single day. Why? A wave of confusion hit the market after reports claimed the Indian government might bring back charges on UPI payments.

Just when investors started to panic, the Finance Ministry stepped in. The Finance Ministry firmly rejected the rumors, labeling them untrue and misleading. However, the impact had already hurt Paytm stock and investor trust.

Explore what UPI MDR is, why this topic matters, and how it could shape Paytm’s future in India’s fintech race. Whether you’re an investor, a user, or just curious about the digital money world, this guide is for you.

On June 12, 2025, Paytm’s parent company, One 97 Communications, saw its stock fall nearly 10%, hitting an intraday low of around ₹864 on the BSE Sensex. The plunge came after the Finance Ministry cleared the air. There would be no Merchant Discount Rate (MDR) on UPI transactions. Investors had been hopeful that MDR fees, which merchants pay on digital transactions, might return. Once this hope vanished, the stock took a sharp hit.

What Is UPI MDR and Why Does It Matter

MDR is a small fee that merchants pay banks or digital platforms like Paytm for processing transactions. Since 2020, UPI payments have been fee-free for merchants, as part of a push for digital adoption.

Many industry players argued that the MDR waiver was costing banks and fintech firms. In March, the Payments Council of India asked the government to reintroduce MDR, especially for large-value UPI payments. If MDR had returned, Paytm Share and others could’ve gained income on every UPI transfer.

How the Market Reacted

Rumors about MDR being back sparked hope among investors. But when the Finance Ministry dismissed the rumors as “false, baseless, and misleading”, it triggered a wave of selling. Analysts say this kind of swift policy denial can shake investor trust hard.

This was Paytm’s biggest single-day drop in stock value since February 2024. The broader market also felt the pressure, with the Sensex and Nifty slipping around 0.2%.

Analyst Insight: What Lies Ahead

UBS, a global brokerage, warned that without MDR or fresh incentives, Paytm’s adjusted EBITDA could see a hit of over 10% in FY 26–27. They had expected just a small margin boost from MDR, but that option is now off the table.

From a technical view, some analysts noted Paytm Share Price bounced off a trendline near ₹864–₹908. They suggest short-term support is intact, with upside targets around ₹980–₹1,000—if sentiment improves. Still, indicators like MACD show caution.

UPI Growth & Paytm’s Role

UPI continues to thrive. In May 2025, UPI handled 18.68 billion transactions worth almost ₹25 lakh crore, showing a 33% increase compared to the same month last year. That’s roughly 7,000 transactions every second.

Paytm holds a key place, but PhonePe and Google Pay dominate over 80% of the UPI market. Any change in MDR or incentives could shift how these firms grow and make money.

Long-Term Outlook for Paytm

With MDR ruled out, Paytm must explore other ways to earn. Possibilities include more financial services, subscription offers, or cross-border remittances.

We’ll also be watching the next earnings report (Q1 FY 26) closely. Any mention of UPI incentives or fintech partnerships could change investor sentiment fast.

Final Takeaway

The 10% drop in Paytm stock shows how sensitive fintech firms are to government policy. Our key takeaways:

MDR denial hurts revenue hopes
UBS warns of margin erosion
UPI usage remains strong, but Paytm faces fierce rivals
New income paths are essential for Paytm’s growth

FAQS

Why is Paytm stock falling?

Paytm stock is falling because the company is not making enough profit. Also, some rules from the government affected its business and made investors worry.

Why do all shares fall?

All shares fall when people get scared about the economy. Bad news, weak business results, or higher interest rates can make investors sell their shares.

Disclaimer:
This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.