Shares of fintech companies, including Paytm, rallied in early trade on Wednesday after the government announced a 0.4% Merchant Discount Rate (MDR) on UPI payments above Rs 2,000 made to merchants, effective October 15.Shares of One97 Communications Ltd, which owns the Paytm brand, rose 7.24% during intraday trade to hit a 52-week high of Rs 1,856.50 on the BSE. One Mobikwik Systems gained 5.96%, while Pine Labs advanced 2.68%.However, the gains later weakened. Pine Labs was trading nearly 7% lower, while One Mobikwik Systems declined around 2%.The domestic equity markets opened higher on Wednesday, recovering from the previous session’s sharp sell-off. The gains came ahead of the US Federal Reserve’s September 15–16 policy meeting, despite elevated US bond yields and high crude oil prices.The BSE Sensex opened at 74,249.31, compared with the previous close of 74,003.82. It later rose to around 74,388.37, gaining 384.55 points, or 0.52%.The NSE Nifty opened at 23,201.60 against the previous close of 23,118.60. It was trading at around 23,244.30, up 125.70 points, or 0.54%.By 1:22 pm, the Sensex had gained 425.55 points, or 0.58%, to trade at 74,429.37. The Nifty 50 was up 139.50 points, or 0.60%, at 23,258.35 at 1:23 pm.At around 9:29 am, Paytm shares were trading at Rs 1,767.05, up Rs 35.95, or 2.08%. One Mobikwik Systems was quoted at Rs 203.90, higher by Rs 1.95, or 0.97%.Most sectoral indices traded in the green, although Nifty Realty, Consumer Durables and Healthcare remained under pressure. Most broader market indices also traded higher.In the commodities market, Brent crude was trading at around $108.06 per barrel, while crude oil was quoted at approximately $104.69 per barrel. Gold was trading at around $4,326.65.The government’s decision marks a shift after nearly six years of fully free UPI payments. Under the new framework, a 0.4% MDR will apply to person-to-merchant (P2M) UPI transactions above Rs 2,000. The charge will be capped at Rs 300 for transactions worth Rs 75,000 or more.Everyday person-to-person (P2P) payments and small merchant transactions will remain free. “Customers will not be required to pay any charge when making such payments through UPI,” the finance ministry said in a statement.“MDR is a charge within the merchant payment ecosystem. It is not a charge on customers making UPI payments,” it added.Individuals will also continue to have “unlimited free usage, with no monthly quotas, volume restrictions or tiered caps on free UPI transactions”, the ministry said.Paytm said the new framework would generate additional revenue from merchant transactions that were previously free. “This will generate additional revenue from the merchant business for many of the payment transactions that were free earlier,” Paytm said in a regulatory filing late on Tuesday.According to an NPCI circular, customers would not be charged for UPI payments, which would continue to remain free, the company added.