Merchant Discount Rate (MDR)

The Merchant Discount Rate (MDR) is the total fee charged to a merchant by their acquiring bank or payment service provider for processing debit and credit card transactions, typically expressed as a percentage of the transaction value plus a small fixed fee. This critical payment system cost is composed of three primary elements: the non-negotiable Interchange Fee paid to the card-issuing bank, the Scheme Fee paid to the card network (e.g., Visa, Mastercard), and the Acquirer/Processor Markup.