Merchant Discount Rate (MDR) is a fee agreed and paid by a merchant to an acquiring bank for accepting the payment from their clients/ customers. For each processing of debit and credit card transactions is being charged based MDR. Merchants must agree to the rate to accept debit and credit card services before setting up for their clients/ customers.

The merchant discount rate is a fee based on the acquiring bank for each approved merchants with a category of low to high-risk. The MDR rate is charged based on a percentage of each transaction amount.  For example, in a USD100 transaction, if 5.8% is the merchant discount rate, USD5.80 is paid to the acquirer by the merchant.