Glossary
Merchant discount rate (MDR)
The merchant discount rate, MDR, is the total fee a merchant pays on a card payment: the interchange that goes to the issuer, the scheme fees that go to Visa or Mastercard, and the margin of the acquirer or payment service provider. It is quoted as a percentage, sometimes with a fixed part, either blended as one rate or unbundled as interchange plus a markup.
Blended and interchange-plus
A blended rate is one percentage for every card, simple to read and usually more expensive for cheap cards. Interchange-plus passes the actual interchange and scheme fees through and adds a fixed markup, so the merchant’s cost follows the card mix. Large merchants and PSPs buy interchange-plus from acquirers and sell blended rates to their smaller merchants; the difference is the PSP’s margin.
What moves the rate
The card type and level, domestic or cross-border, the merchant’s category and risk, the volume, and the method: instant bank payments and Open Banking carry a flat fee with no interchange, which is why they beat cards on high amounts.
On the platform
Tranzify’s ledger expresses fees as rules per merchant, method and terminal: a percentage, a fixed part, minimums, separate rules for pay-ins, payouts and refunds; the fee of every payment is written next to it, so a client sees its margin per terminal and its price to each merchant in the reports.
Updated: 2026-11-08