The fees payable to Third Party Application Providers (TPAPs) and payer Payment Service Providers (PSPs) will be lowered starting April 1, 2026
Under the revised structure, the TPAP fee for non-industry transactions has been reduced from 8 basis points to 6 basis points
Meanwhile, the fee for industry transactions has been cut from 4 basis points to 3 basis points
The National Payments Corporation of India (NPCI) has proposed the revision of the fee structure for RuPay credit card transactions on UPI.
As per an NPCI circular, the fees payable to Third Party Application Providers (TPAPs) and payer Payment Service Providers (PSPs) will be lowered starting April 1, 2026.
Under the revised structure, the TPAP fee for non-industry transactions has been reduced from 8 basis points to 6 basis points, while the fee for industry transactions has been cut from 4 basis points to 3 basis points. The fee is split equally between the payer PSP and the UPI app handling the transaction.
The revision will not apply to the small offline merchant category for transactions up to ₹2,000, as well as EMI transactions, AutoPay mandates and Reserve Pay, where the existing fee structure will continue.
These changes apply to all domestic transactions made via RuPay credit cards on UPI and will affect revenue earned by consumer payment apps that process these payments.
The development was disclosed by Paytm in an exchange filing citing an NPCI circular dated March 10. The fintech major said that the proposed revisions would not have a material impact on its overall business.
It said the change only affects revenue earned by consumer-facing UPI apps for processing payments. It added that the revision does not affect revenue generated from merchant payments, including UPI merchant QR transactions.
The company noted that a large share of its payments revenue comes from merchant payments, where it said it continues to hold a strong position. “The circular does not have any impact on merchant MDR (Merchant Discount Rate), as it is priced by the company for the merchants it acquires,” it noted.
Paytm also said its payments processing margin remains above four basis points and is expected to improve as merchants adopt higher-margin payment products such as Paytm Postpaid, EMI options and RuPay credit cards on UPI.
In the UPI ecosystem, a TPAP is a consumer-facing payments app that allows users to initiate transactions through UPI. Apps such as Paytm, Google Pay and PhonePe fall under this category.
These apps do not directly move the money themselves. Instead, they act as the interface through which users initiate payments, while the actual transfer is processed through partner banks connected to the National Payments Corporation of India’s UPI network.
For enabling these transactions, TPAPs receive a small fee per transaction, known as the TPAP fee. This fee is calculated in basis points and is typically paid out of the merchant discount rate (MDR) applicable to RuPay credit card transactions on UPI.
When the TPAP fee is reduced, it means the payments app earns slightly less revenue for every eligible transaction processed on its platform. However, the impact depends on how much of the overall payments volume comes from those specific transactions.
In Paytm’s case, the company said most of its payments revenue is driven by merchant-side services and value-added products rather than TPAP fees alone. As a result, the revision in TPAP fees is not expected to materially affect its financial performance.
In the third quarter of the ongoing fiscal year (Q3 FY26), Paytm posted a net profit of ₹225 Cr as against a loss of INR 208 Cr in the year-ago quarter. Its top line for the quarter under review surged 20% YoY and 7% QoQ to ₹2,194 Cr.
Shares of Paytm ended today’s trading session 1.39% lower at ₹1,026.05
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