Paytm Says NPCI’s RuPay Credit Card Fee Reduction on UPI Won’t Affect Financial Performance
Paytm Says NPCI’s RuPay Credit Card Fee Reduction on UPI Won’t Affect Financial Performance
Paytm’s parent company, One 97 Communications, has assured investors that the National Payments Corporation of India’s (NPCI) recent reduction in fees for RuPay credit card payments via the Unified Payments Interface (UPI) will have minimal impact on the company’s financial performance.
Starting April 1, 2026, NPCI has lowered the charges for third-party application providers (TPAP) and payer payment service providers (PSPs) handling RuPay credit card transactions. One 97 Communications clarified that this change only concerns revenue earned from consumer UPI apps and does not affect earnings from merchant transactions, which form the majority of Paytm’s payment income.
With merchant transactions contributing the bulk of its revenue and maintaining margins above four basis points, Paytm expects the fee reduction to be largely inconsequential. The company continues to focus on promoting higher-margin services, including Paytm Postpaid, EMIs, and RuPay credit cards on UPI, as part of its strategy to enhance monetisation.
Under the revised structure, TPAP fees for consumer payments via RuPay credit cards on UPI have been reduced from 8 basis points to 6 basis points for the Non-Industry category, and from 4 basis points to 3 basis points for the Industry category. These classifications are designed to differentiate merchants and adjust fees accordingly.
Paytm emphasized that this fee primarily goes to the consumer UPI apps that process transactions as TPAP, making the financial effect of the revision negligible for the company.
The company’s recent financial results show strong momentum. In Q3 FY26, Paytm reported a net profit of ₹225 crore, rebounding from a loss of ₹208 crore in the same period last year. Operating revenue grew 20% to ₹2,194 crore, up from ₹1,828 crore a year earlier.
A report from Bernstein highlighted that Paytm is ahead of competitor PhonePe in monetisation. While both firms have comparable business margins, Paytm’s tighter control on costs has enabled it to achieve profitability, whereas PhonePe continues to operate at a loss.
In conclusion, while the NPCI fee adjustment has sparked discussions, Paytm’s diversified revenue streams and focus on higher-margin offerings leave the company well-positioned to sustain its financial growth, ensuring that the change in consumer TPAP fees is unlikely to disrupt its overall earnings.
