UPI MDR: Google Pay leads, Paytm to gain; what Goldman Sachs, Jefferies see for other UPI players

The new Merchant Discount Rate (MDR) framework for Unified Payments Interface (UPI) transactions is set to create a new revenue stream for payment companies, with Paytm emerging as a key beneficiary, according to separate reports by Goldman Sachs and Jefferies. The two brokerages have highlighted the potential earnings impact of the new charges while pointing to the concentration of UPI payments among a handful of platforms.

Google Pay dominates UPI value

Jefferies' analysis of FY26 data shows that Google Pay accounted for 35% of UPI transaction value, making it the largest platform by value. Paytm followed with a 6% share, while CRED accounted for 2%. Other platforms collectively represented 57% of transaction value.

The pattern is broadly similar when measured by transaction volumes. Google Pay had a 27% share, Paytm 6% and Navi 2%, while other platforms accounted for 66% of UPI transaction volumes.

Jefferies said UPI transaction value remains concentrated among the top four to five players, making the introduction of MDR particularly relevant for large payment platforms.

Where does the MDR apply?

Under the framework cited by Jefferies, a 0.4% MDR will apply to eligible P2M UPI transactions above ₹2,000, with exemptions and caps. Small merchants with monthly QR-based UPI payments below ₹1 lakh will remain outside the MDR framework. MDR for essential services such as electricity and telecom is capped at ₹5 per transaction, while capital-market transactions attract 0.02% MDR, subject to a ₹300 cap.

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Jefferies estimates that transactions above ₹2,000 account for only 4% of P2M volumes but around 67% of P2M payment value.

Paytm could see a major earnings impact

Goldman Sachs estimates that around 48% of UPI P2M transaction value could qualify for the full 40-bps MDR. It puts the potential industry revenue pool at around ₹20,600 crore, although a press report cited a lower figure of about ₹16,000 crore.

For Paytm, Goldman Sachs estimates ₹840-1,400 crore of incremental FY28 EBITDA, equivalent to around 43-72% of its existing FY28 EBITDA estimate. Its bottom-up assessment produces a broadly similar ₹850-1,410 crore range.

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Jefferies has also raised its Paytm earnings estimates, increasing FY28-29 earnings by 10-12% after factoring in the 40-bps MDR framework. It estimates that net UPI MDR could add 9% to Paytm's FY28 revenue and 31% each to EBITDA and PBT under its assumptions.

Pine Labs also stands to benefit

Jefferies estimates an incremental ₹160 crore revenue opportunity for Pine Labs by FY28 from UPI MDR. This is equivalent to about 20% of its estimated FY28 EBIT and PBT.

Both brokerages, however, flag uncertainty around the eventual benefit, particularly because lower MDR slabs, exemptions and competitive pressure could affect how much of the charge is ultimately retained by payment ecosystem participants.

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