In a shocking development, India’s biggest mobile wallet: Paytm has decided to charge a flat 1% MDR fee for all payments received on wallet.
This is a big blow to the vision of Digital India, and lakhs of merchants will be impacted due to this.
Paytm Will Charge 1% MDR Now For All Payments On Wallet
Paytm has updated their offer page for merchants, wherein they have stated that from now on, every merchant who receives any payment on their wallet, will pay 1% MDR fes.
Their updated offer page states: “Only Paytm All-In-One free UPI QR allows payments from all UPI apps and Paytm wallet! Accept unlimited payments from all UPI apps and bank accounts at 0% fee. Paytm wallet at 1% fee from 4th May 2020.”
Who Will Be Impacted? And Why?
Earlier, there used to be zero MDR fees for merchants, who received less than Rs 20,000, and there was 2% MDR fees for those who received more than Rs 20,000.
Since majority of merchants receive less than Rs 20,000 (based on our calculation, and market research, around 60-70% merchants receive less than Rs 20,000 on their Paytm wallet), this will severely impact their business revenues and profits.
On the other hand, bigger merchants who used to pay 2% on transactions of more than Rs 20,0000, they will be relieved, since now, they will only pay 1% MDR, instead of 2% earlier.
What Is Exempted From 1% MDR?
In case any merchant used the code for accepting payments directly into their bank accounts via UPI, there is no charges for them.
Hence, the extra charge of 1% MDR is applicable only when merchants use Paytm wallet to accept their payments.
This is a developing story, and we have asked Paytm representatives for more clasrifications.
We will keep you updated, as we receive more details.
Source: MediaNama was the first to report this major development.
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