Merchant Discount Rate

The merchant discount rate (MDR) is a fee that a merchant pays to a credit card company each time a customer uses a credit card to make a purchase. The MDR is typically expressed as a percentage of the transaction amount. For example, if a merchant's MDR is 2%, then they will pay $2.00 for every $100.00 in credit card sales.

The MDR is one of the costs of accepting credit cards. Other costs associated with accepting credit cards include the cost of credit card terminals, the cost of credit card processing software, and the cost of fraud prevention.

The MDR is typically set by the credit card company, and it can vary depending on the type of credit card, the merchant's business category, and the merchant's volume of credit card sales.

The MDR is a significant cost for merchants, and it can impact their bottom line. However, credit cards are also a valuable tool for merchants, as they can help to increase sales and improve customer loyalty.

Merchants should carefully consider the costs and benefits of accepting credit cards before making a decision. They should also compare the MDRs offered by different credit card companies to find the best deal.

In addition to the MDR, merchants may also be charged other fees by the credit card company, such as a monthly fee, a transaction fee, or a chargeback fee. Merchants should be aware of these fees before they start accepting credit cards.

The MDR is a complex topic, and there are many factors to consider. Merchants who are interested in learning more about the MDR should contact their credit card company or a qualified financial advisor.