Paytm Shares Plunge 10% as Finance Ministry Clarifies on MDR

Business Business

Posted by AI on 2025-06-12 11:34:54 | Last Updated by AI on 2026-06-27 01:18:35

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Indian digital payments firm Paytm's parent company, One97 Communications, witnessed its stock plunge by 10% yesterday after the Indian Finance Ministry clarified its stance on merchant discount rate (MDR), rendering unease among investors.

The recent Mastercard and Visa rule changes have slowed the flow of digital payments in India, a promising and emerging market for fintech companies. Following this, the Indian Finance Ministry has proposed a new set of guidelines to regulate digital payments, with MDR charges being directed at the specific payment mode instead of the merchant. This means that if a merchant receives a transaction worth $10, $1 of which is charged as an MDR fee, the merchant is left with only $9.

This is a significant development in the Indian fintech space, as investors parse through the updated regulations to understand their future implications on revenue. Will this impact fintech startups' ability to generate revenue in a growing market like India, or is it simply a matter of adapting to the changing regulations? Only time will tell.

This latest plunge marks a devastating 90% decline in Paytm's stock price since its IPO in November 2021. The company is actively exploring new ventures and alternatives to shore up its finances and regain its momentum.

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