What is a merchant discount rate? The fee on every card payment
By SendPay Business · · 2 min read
The merchant discount rate, or MDR, is the total fee a business pays on each card payment, usually shown as a percentage. If the MDR is 1.5%, a £100 sale reaches the business as £98.50.
What is inside the rate
- Interchange, paid to the customer's card issuer.
- Scheme fees, paid to networks such as Visa and Mastercard.
- The acquirer's or payment provider's own margin.
Why rates differ
Credit cards, business cards and cards issued abroad usually cost more than local debit cards. Online payments often cost more than in-person ones, and businesses with higher sales or lower risk can often negotiate lower rates.
MDR around the world
The term is used widely in India, where MDR on RuPay debit cards and UPI payments was set to zero from January 2020. Elsewhere providers may call the same thing a processing fee or transaction fee.
How to compare providers
Ask for the full cost per payment, not just a headline rate. Check whether it is a single blended rate or interchange-plus, and whether there are monthly, refund or chargeback fees on top.
Where SendPay fits
SendPay doesn't offer card machines or acquiring. SendPay platforms let you get paid with payment links, invoices and subscriptions, alongside GBP, EUR and USD accounts and branded Visa cards, powered by licensed partners.
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Build my platform →Questions people ask
What will the card fee be on a sale?
Work out the fee from your own rate in the free calculator.
Card fee calculator →What is an interchange fee?
The part of a card fee paid to the customer's card issuer.
Interchange fees →What is interchange-plus vs blended pricing?
Two ways providers set out their card fees.
Interchange-plus vs blended →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.