Meaning of MDR
MDR stands for Merchant Discount Rate. MDR is the fee charged to merchants for accepting digital payments through debit cards, credit cards, or UPI. It is usually a percentage of the total transaction. The amount is shared between the issuing bank, payment service provider, and card/UPI network operator.
Importance of MDR
MDR ensures the cost of secure transactions is covered. Regulators often set MDR caps to encourage more merchants, especially small businesses, to adopt digital payments.
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