Definition
Merchant Discount Rate – The fee a merchant pays (usually a small percentage of the transaction value) to accept a digital payment, split between the acquiring platform, the card/payment network, and the issuing bank. In India, MDR on UPI» transactions has been set to zero by regulation since 2020, which is why a payments company operating at scale on UPI rails needs other revenue lines (subscriptions, lending, advertising) to monetize a large share of the merchants and volume passing through its platform. Found In: Notes to Financial Statements (revenue recognition), Operating metrics disclosure