As your payments partner, WebPays will empower your business at every step of the journey with the insights, expertise, and transparency required to help your business save more money and make data-driven decisions. For more information, please feel free to extend your reach to us to apply for a credit card merchant account today. Visit us at: https://webpays.com/credit-card-merchant-account.html

1. How to Determine Merchant Discount
Rate?

2. An Introduction
In the complex world of financial transactions, merchants are often left clueless or
overwhelmed with various fees and terms. Among these, the Merchant Discount Rate
(MDR) holds significant importance. This is the fee charged on a credit card merchant
account by payment processors for facilitating card transactions.

3. Understanding the Merchant Discount Rate
(MDR)
Merchant Discount Rate (MDR), is also known as the discount rate or the transaction
discount rate (TDR). It is generally calculated as a percentage of the transaction amount
and shown as a single percentage.
• Interchange fee: Established by the credit card network (e.g., American Express, Visa),
this fee is charged by the card-issuing bank to the merchant's bank.
• Assessment fee: It is charged by the credit card network (e.g., American Express, Visa)
for using its network. It generally ranges from 0.10-0.15 percent of the total transaction
amount for a majority of domestic transactions.

4. Calculation of MDR
MDR = (Transaction Amount × Percentage Rate) + Fixed Fee
Merchants may negotiate MDR with payment processors, especially if they have a high
transaction volume. The success of such negotiations greatly depends on factors such as
the competitiveness of the payment processing market, the type of credit card merchant
account, the industry, and the merchant's creditworthiness and record. Merchants may
have to demonstrate a strong transaction history or explore quotes from multiple providers
to leverage better rates.

5. Factors Influencing MDR
 Card Type: Various card types incur different MDRs. Credit cards tend to have higher
rates compared to debit cards because of their associated risks and benefits.
 Transaction Method: MDR is significantly impacted by the method through which a
transaction gets processed. For instance, card-present transactions (where the physical
card is tapped, swiped, or inserted) tend to have lower rates compared to card-not-
present transactions, such as online or phone transactions.

6. Factors Influencing MDR
 Merchant Category Code (MCC): Different businesses are categorized differently based
on their nature, reflecting the perceived risk and costs associated with each category.
 Average Ticket Size: Smaller transactions tend to incur higher MDR percentages while
larger transactions may incur lower MDR percentages. This is because the fixed
processing costs get spread across the transaction amount.

7. How Merchants Can Optimize MDR?
Merchants must compare different offerings from different payment processing when it
comes to choosing the best credit card merchant account. Furthermore, they should
assess not only the merchant discount rate but also service reliability, additional fees, and
customer support. Merchants should carefully analyze and interpret the risk profile
associated with their industry before getting into negotiations to optimize MDR. A lower or
average risk profile may result in reduced merchant discount rates.

8. What pricing model does WebPays.com
offer for a credit card merchant account?
WebPays.com offers a fair and transparent interchange pricing model, charging merchants
for transactions separately to make sure there are no extra or hidden expenses. We do
understand, just like you that interchange fees are inevitable but we do assist you to
leverage them so your business can grow exponentially over time. Our different credit card
merchant account models allow you to retain a larger portion of the transaction amount.
Over a significant transaction volume and time, these savings can greatly accumulate to
positively influence the overall profitability of your business.

9. Conclusion
As your payments partner, WebPays will empower your business at every step of the
journey with the insights, expertise, and transparency required to help your business save
more money and make data-driven decisions. For more information, please feel free to
extend your reach to us to apply for a credit card merchant account today.

10. THANK YOU