What
is a discount rate & how is is calculated?
- by iMerchantNetwork.com
Each time a merchant processes a credit card transaction, two
immediate charges apply: the first and most visible is the
discount rate.
The discount rate is a percentage of the sale subtracted (discounted)
from the total order amount.
This discount rate can vary from 1.5% to over 6% depending
on the type of business (retail, mail order, internet, high-risk,
etc) and the processor the merchant has selected to use.
EXAMPLES:
You
(the merchant) process a $49 sale
Your discount rate is 1.55%
$0.76 is discounted from the sale leaving you $48.24 You
(the merchant) process a $100 sale
Your discount rate is 2.29%
$2.29 is discounted from the sale leaving you $97.71
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