New Delhi, Aug. 8 -- The government has opened the door to introducing a nominal Merchant Discount Rate (MDR) on a limited set of UPI merchant transactions above a certain threshold, while assuring that consumers and person-to-person payments will continue to remain free.

The Ministry of Finance on Saturday said any future MDR on UPI would not be imposed across all merchant transactions and would be substantially lower than charges applicable to debit and credit card payments.

"As and when MDR charges are introduced, they will apply only to a limited set of merchant transactions, above a certain threshold, at a nominal rate, far lower than debit or credit card MDRs," the Finance Ministry said in a release.

It added that the "vast major...