ATM-Related Stocks Gain as New UPI MDR Framework Brings Cash Businesses Into Focus

Shares of cash-management companies moved higher on September 16, as the introduction of merchant charges on select UPI payments brought fresh attention to businesses linked to cash withdrawals and ATM services. 

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Radiant Cash Management Services and CMS Info Systems were among the stocks that gained during the session, rising as much as 2.8% and 5%, respectively. By 11:48 am, Radiant Cash Management was trading 2.8% higher at ₹36.90, while CMS Info Systems was up 3.3% at ₹230.32. 

SIS Ltd also joined the gains, rising 1.2% to ₹420. Its cash logistics business provides services including ATM management, cash replenishment and secure transportation of cash across India. 

The movement came a day after the National Payments Corporation of India introduced a merchant discount rate on select UPI transactions. From October 15, a 0.4% fee will apply to eligible merchant payments above ₹2,000. 

The development has put both digital-payment companies and businesses connected with the cash ecosystem in focus. For cash-management companies, the market reaction reflected expectations that introducing a charge on some higher-value UPI merchant payments could encourage greater use of cash and, in turn, support withdrawal activity. 

The change also opens a new source of transaction-linked income for banks and payment companies after more than six years of free UPI payments. 

Estimates cited in the report suggest the revenue opportunity could be sizeable, although its distribution across the payments ecosystem remains uncertain. Citi estimated an annual revenue pool of ₹16,000 crore to ₹17,000 crore, with around 60% potentially going to banks, 25% to app providers and 15% to aggregators. 

The eventual financial impact, however, will depend on the mix of transactions, exemptions under the new framework and how the collected fees are divided among participants. 

For comparison, credit-card transactions in India typically carry a merchant discount rate of around 1.5%, while debit-card charges can be as high as 0.9%. 

The September 16 move in Radiant Cash Management, CMS Info Systems and SIS therefore came as investors assessed how the UPI pricing change could play out beyond banks and fintech companies. With the new fee taking effect from October 15, the extent to which it changes payment or cash-withdrawal behaviour remains to be seen.