The NPCI has reduced fees for third-party apps processing RuPay credit card transactions via UPI, effective April 2026. Paytm's parent company states this change only affects revenue from consumer-facing UPI apps and will have a minimal financial impact, as most of its payment revenue comes from merchant transactions.
The company is focusing on promoting higher-margin products like Paytm Postpaid and EMI to boost monetization. This strategy aligns with its recent return to profitability, as evidenced by its Q3 FY26 net profit of Rs 225 crore and 20% revenue growth.
A Bernstein report notes Paytm is ahead of rival PhonePe in monetization and has achieved profitability through greater cost control, while PhonePe remains loss-making.
Main Topics: NPCI fee reduction for RuPay credit card UPI transactions, Paytm's financial performance and revenue sources, comparison with competitor PhonePe.
One 97 Communications, the parent company of fintech platform Paytm, said the National Payments Corporation of India (NPCI) has reduced third-party application provider (TPAP) and Payer PSP (payment service provider) fees on RuPay credit card transactions made via the unified payments interface (UPI), effective April 1, 2026.
The company clarified that the circular relates to ârevenue made by consumer UPI apps and has no impact on revenue earned from merchantsâ¦â.
With most of its payment revenue coming from merchant transactions and margins above four basis points, Paytm expects the fee reduction to have a minimal effect on its overall financial performance. The company continues to promote higher-margin products such as Paytm Postpaid, EMI, and RuPay credit cards on UPI to boost monetisation.
Under the new structure, the TPAP fee for consumer payments through RuPay credit cards on UPI has been cut 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.
âThis fee is earned by the consumer UPI app for processing consumer transactions as TPAP, and the financial impact of this revision is immaterial for the Company,â One 97 Communications said.
In Q3 FY26, Paytm posted a net profit of Rs 225 crore, reversing a loss of Rs 208 crore in the same period last year. The Noida-based payments company also saw its operating revenue rise 20% to Rs 2,194 crore from Rs 1,828 crore a year earlier.
Meanwhile, a recent Bernstein report noted that Paytm is ahead of rival PhonePe in monetisation, though both firms have comparable business margins. Paytm, with greater control over costs, has achieved profitability, whereas PhonePe remains in the red.
The company clarified that the circular relates to ârevenue made by consumer UPI apps and has no impact on revenue earned from merchantsâ¦â.
With most of its payment revenue coming from merchant transactions and margins above four basis points, Paytm expects the fee reduction to have a minimal effect on its overall financial performance. The company continues to promote higher-margin products such as Paytm Postpaid, EMI, and RuPay credit cards on UPI to boost monetisation.
Under the new structure, the TPAP fee for consumer payments through RuPay credit cards on UPI has been cut 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.
âThis fee is earned by the consumer UPI app for processing consumer transactions as TPAP, and the financial impact of this revision is immaterial for the Company,â One 97 Communications said.
In Q3 FY26, Paytm posted a net profit of Rs 225 crore, reversing a loss of Rs 208 crore in the same period last year. The Noida-based payments company also saw its operating revenue rise 20% to Rs 2,194 crore from Rs 1,828 crore a year earlier.
Meanwhile, a recent Bernstein report noted that Paytm is ahead of rival PhonePe in monetisation, though both firms have comparable business margins. Paytm, with greater control over costs, has achieved profitability, whereas PhonePe remains in the red.
Meridiano
