What is a discount rate

What is a discount rate

Every merchant account holder is required to pay certain rates and fees for accepting credit and debit cards. A discount rate is a specific fee that is charged for every transaction that is processed.

To begin the process of applying for a merchant account, please complete our Merchant Account Application form.

Discount rates explained

A discount rate is a rate that is charged whenever a transaction for a credit and debit card is processed. The discount rates usually make up the majority of a merchant’s costs, and it is therefore important to carry out research regarding different merchant account processor’s fees, prior to signing any agreement. Every merchant account discount rate is generally different, and will depend upon a number of factors, such as the size of the company and the volume of transactions being carried out. In addition, how the card is processed with influence the discount rates, where the fees are usually lower if you are swiping cards, and higher if the transactions are being carried out in an online/card not present setting.

Banks and other merchant account providers use different discount rates and price models. For example if you have a discount rate of 2.5% and you charge a customer $100 for services or goods, the transaction fee will be $2.50. When selecting a merchant account provider it is important to look at a number of aspects and features of the account, and not simply the discount rates.