The government will introduce MDR for certain person-to-person (P2M) UPI transactions from October 15, with merchants paying 0.4% on transactions above Rs 2,000, the National Payments Corporation of India (NPCI) announced on Tuesday. A maximum fee of Rs 300 may be levied on such transactions of Rs 75,000 or more.
CMS Info Systems is one of India’s largest cash management and business services companies offering physical logistics, banking automation and AI-powered technology solutions.
How is CMS Infosystems a beneficiary?
The positive impact for CMS Info Systems is primarily due to the potential return to using cash for higher value trading transactions.
Since the MDR is 0.4% for UPI P2M transactions above Rs 2,000 from October 15, digital payments of higher value will no longer be completely free for merchants. This may make cash payments relatively more attractive to some merchants, especially where transaction costs are high and margins are tight.
This could benefit CMS as its core business includes cash logistics, ATM cash management, retail cash management and in-transit collection services.
“CMS Infosystems”: results of the first quarter
Cash logistics major CMS Info Systems reported a 10.6 per cent year-on-year decline in consolidated profit after tax (PAT) to Rs 83.7 crore in the first quarter of FY27 compared to Rs 93.6 crore in the same quarter a year ago. Consolidated revenue, however, grew 1.2% year-on-year to Rs 634.7 crore in the first quarter of FY27 from Rs 627.4. crores in the first quarter of FY26. EBITDA increased 6.9% year-on-year to Rs 168.8 crore from Rs 157.9 crore and EBITDA margin improved to 26.6% in Q1 FY27 from 25.2% in the year-ago quarter.
CMS Info stock has had a tough 2026, down 19% over the past six months and down 35% year to date. The stock is down 45% over the past year.
RBI supports MDR allegations
The Reserve Bank of India (RBI) has backed the introduction of a merchant discount rate (MDR) for high-value UPI transactions, saying the move will help strengthen the long-term sustainability of India’s digital payments ecosystem. In a post on X, the central bank said the move will allow UPI to continue scaling, innovating and serving consumers and businesses across the country.
For almost seven years, UPI became increasingly popular as the transaction could be completed very quickly and without any additional fees. However, the government has repeatedly clarified that UPI will remain free for citizens and personal transactions will continue without charge.
Discussing the cost of digital payments infrastructure, RBI Governor Sanjay Malhotra said in August: “Someone has to pay the cost.” He stressed that RBI wants digital payments to remain accessible, affordable and secure, as well as sustainable.
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