India, Aug. 9 -- 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 users that consumer and person-to-person payments will remain free.

Clarifying its position on MDR, the government said the charges, if introduced, would apply only to a limited category of merchant transactions above a specified threshold and would be levied at a nominal rate.

"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 government said in a statement.

It further clarified that the vast majorit...