Merchant Discount Rate

Fun fact: businesses have to pay a fee to credit card companies every time a card is used to purchase their goods and services. Different card companies charge different fees, and different types of vendors pay different fees, but one thing all those fees have in common is that they’re called “merchant discount rates.”

The rates are established as soon as a business decides it’s going to accept plastic, and for the most part, the fees range from 1% to 3% of the overall purchase amount. It might not sound like much on the surface, but those fees can add up, so they’re definitely something we should budget for if we’re thinking of accepting credit and debit cards at our own place of business.