One 97 Communications, parent of Paytm, shares gained 5.3 per cent on BSE, logging an intraday high at Rs 700.7 per share. The stock rallied after reports suggested that Indian government may consider restoring merchant charges on UPI.

These charges, known as the merchant discount rate (MDR) in the payments industry, are fees merchants pay to banks to process real-time transactions. Currently, no MDR is applied to UPI and RuPay debit card payments, which are facilitated through the National Payments Corporation of India (NPCI).

Around 11:58 AM, Paytm share price was up 4.57 per cent at Rs 695.55 per share on BSE. In comparison, the BSE Sensex was down 0.22 per cent at 73,954.65. The market capitalisation of the company stood at Rs 44,352.96 crore. The 52-week high of the stock was at Rs 1,063 per share and the 52-week low was at Rs 310 per share.

Reports, the banking industry's large merchants have made a formal request to reintroduce MDR on UPI transactions to the Union government, and the relevant departments are reviewing it. According to the proposal, MDR could be reinstated for merchants with an annual turnover exceeding Rs 40 lakh based on their goods and services tax (GST) filings.

Besides, the government is also expected to mull a tiered pricing model for UPI, where larger merchants would incur higher charges, while smaller businesses would pay a reduced fee. For merchants with an annual turnover below Rs 40 lakh, UPI payments would remain free.