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CMA Final · Strategic Financial Management · Digital Finance

A payment aggregator in Pune processes UPI collections for merchants. In a month it handles 40,00,000 transactions of average value Rs 500. Merchant discount rate (MDR) on UPI is zero, but the aggregator earns Rs 0.30 per transaction from a sponsor bank incentive and incurs processing cost of Rs 0.22 per transaction. What is its monthly operating margin from this activity?

The monthly operating margin is Rs 3,20,000. With zero MDR, the only revenue is the Rs 0.30 incentive per transaction, and cost is Rs 0.22, leaving Rs 0.08 per transaction, which on 40 lakh transactions gives Rs 3,20,000.

  1. ARs 3,20,000Correct
  2. BRs 8,80,000
  3. CRs 12,00,000
  4. DRs 1,00,00,000

Explanation

Net margin per transaction = 0.30 - 0.22 = Rs 0.08. Monthly margin = 40,00,000 x 0.08 = Rs 3,20,000. Rs 8,80,000 is the cost alone (0.22 x 40 lakh), and Rs 12,00,000 is the incentive alone, ignoring cost.

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