What is the Merchant Discount Rate?
The Merchant Discount Rate is the total fee a merchant pays to accept card payments. It is usually expressed as a percentage of each transaction.
What does MDR include?
MDR typically includes interchange fees, card scheme fees, and the acquirer or processor markup. It represents the full cost of card acceptance.
Why is MDR important?
It directly affects profit margins. Even small changes in MDR can have a significant impact on businesses with high transaction volumes.
How is MDR calculated?
It is calculated as a percentage of the transaction value, sometimes combined with fixed fees per transaction depending on the pricing model.
Can MDR be reduced?
Merchants reduce MDR by negotiating with providers, improving transaction mix, and selecting pricing models suited to their business.