Which one of the following best describes the term Merchant Discount Rate sometimes seen in news?

Question

Accepted Answer

Merchant Discount Rate is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments. It compensates the card issuing bank, the lender which puts the PoS terminal and payment gateways such as Mastercard or Visa for their services.MDR charges are usually shared in pre-agreed proportion between the bank and a merchant and is expressed in percentage of transaction amount.