The drop came after the Finance Ministry dismissed reports suggesting the government was considering the introduction of a merchant discount rate (MDR) on UPI transactions.

Currently, banks and payment service providers like Paytm do not earn MDR on UPI payments, as the government has waived such charges to promote digital payments. However, recent online reports claimed that MDR might be reintroduced for high-value UPI transactions, sparking speculation in the market.

In a strongly worded statement, the Finance Ministry called these claims 'baseless and sensational,' adding that such misinformation creates unnecessary uncertainty and fear among citizens.

Back in March, the Payments Council of India, representing digital payment firms, had written to Prime Minister Narendra Modi, urging the government to consider reintroducing MDR, suggesting a 0.3% charge on large UPI transactions and a nominal MDR on RuPay debit card transactions.

UPI processed 18.68 billion transactions in May. In value terms, UPI transactions totalled Rs 25.14 lakh crore in May, up from Rs 23.95 lakh crore in April. The May figures also mark a 33^ year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at Rs 81,106 crore, while the average daily transaction volume was 602 million. The success of UPI placed India in a leadership position with a share of 48.5% in global real-time payments by volume.

Paytm is India's leading mobile payments and financial services distribution company. The fintech company reported a consolidated loss of Rs 539.80 crore for Q4 March 2025, lower than net loss of Rs 549.60 crore in the same quarter last year. Revenue from operations fell by 15.7% to Rs 1,911.50 crore in the quarter, down from Rs 2,267.10 crore in the March 2024 quarter.