Merchant discount rate

The Hindu Business Line  Dec 13  Comment 
Aims to give fillip to debit card transactions too, says Deputy Governor BP Kanungo
The Hindu Business Line  Dec 11  Comment 
The RBI’s monetary policy announcement last week proved a damp squib, with the committee deciding yet again to hold interest rates. But one announcement that added a bit of liveliness to the proceedin...
The Hindu Business Line  Dec 6  Comment 
How it impacts returns of banks with significant PoS terminals needs to be seen
The Hindu Business Line  Mar 30  Comment 
The Reserve Bank of India on Thursday said its mid-December 2016 ‘special measures’ on rationalisation of merchant discount rate (MDR) for transactions up to ₹2,000 will continue. The instructions we...
The Economic Times  Jan 23  Comment 
The RBI had decided to slash MDR charges on payments made through debit cards and do away with levies on small transactions.
The Economic Times  Oct 19  Comment 
It is the invisible charge that consumers pay to banks in establishments that accept payment cards. It is invisible because the payment is made by a merchant to his bank in the first instance.


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This is the fee charged to merchant by an acquiring bank - this bank processes the card sales drafts and credits the funds to the merchant's account. The merchant discount depends on sales volume; it generally declines as sales volume increases, and it is negotiated individually with each merchant. For example, if the merchant discount is 3%, the merchant keeps $97 for every $100 in sales. Included in the merchant discount rate is an interchange fee, which is paid to the bank that issued the credit card that was used in each transaction, and an additional percentage that is the profit for the acquiring bank.

See also: Credit Card Industry

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