Merchant Discount Rate (MDR)
The percentage fee on each card transaction paid by the merchant.
Detailed Description
Merchant Discount Rate (MDR)
What is the Merchant Discount Rate (MDR)?
MDR is the fee charged to merchants by banks or payment processors for accepting card payments, typically expressed as a percentage of the transaction amount.
What are the main components of MDR?
The main components of MDR include interchange fees, assessment fees, and processor fees.
How does MDR affect merchants' profitability?
A lower MDR can lead to increased profit margins for merchants, while a higher MDR can erode their profits.
What factors influence the MDR charged to merchants?
Factors include transaction volume, industry type, card type, and payment method.
Can merchants negotiate their MDR?
Yes, merchants can negotiate their MDR with payment processors based on factors like transaction volume and payment history.