Daily Current Affairs and GK

The merchant discount rate is the rate charged to a merchant for payment processing services on debit and credit card transactions. The merchant must setup this service and agree to the rate prior to accepting debit and credit cards as payment.

The merchant discount rate is a fee merchants must consider when managing the overall costs of their business. Local merchants and e-commerce merchants will typically have varying fees and service level agreements. Most merchants can expect to pay a 1% to 3% fee for payment processing of each transaction. Payment processors have well established infrastructures and fee schedule arrangements in place to support all types of merchant payments.

1. MDR is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments. 

2. MDR compensates the card issuing bank, the lender which puts the PoS terminal and payment gateways such as Mastercard or Visa for their services.