ATM-related shares up by 5% today: What's the reason?
What's the story
Shares of cash management companies Radiant Cash Management and CMS Info Systems surged up to 5.4% and 5%, respectively, today. The surge comes after the National Payments Corporation of India (NPCI) announced a fee on select UPI transactions over ₹2,000. The new fee structure will come into effect from October 15 and is expected to increase cash withdrawals due to MDR charges on UPI transactions.
Fee details
New fee structure explained
The new fee structure will see a 0.4% charge on person-to-merchant (P2M) UPI transactions above ₹2,000.
However, concessional rates for select categories and exemptions for small merchants will also be applicable.
Transactions up to ₹2,000, which account for more than 95% of P2M volume, will continue to attract zero MDR while P2P transfers will remain free of charge.
Expert opinions
Brokerages weigh in on new fee structure
Brokerages have given mixed reviews about the new MDR framework.
JM Financial said the 40 bps MDR was much higher than its earlier estimate of 25 bps, but broader exemptions prompted it to cut its eligible GMV assumption from 30% to 20%.
Citi called it a shift away from zero-MDR regime for larger merchant payments, while JPMorgan described it as a "shift from zero-MDR regime to transaction-linked revenue model for banks."