In the context of digital payments in India, the term 'Merchant Discount Rate' (MDR) refers to which one of the following?

Question

Accepted Answer

C. A charge levied by a bank on a merchant for accepting customer payments through the bank's debit or credit cards. The Merchant Discount Rate is the fee a bank charges a merchant each time a customer pays using that bank's debit or credit card, deducted from the amount the merchant actually receives, which is exactly what option C describes. It is not a working capital loan's interest rate, a discount owed to customers, or an interbank settlement fee charged by the RBI, ruling out the other options. Hence option C correctly defines MDR.

Answer

A. The interest rate a bank charges a merchant for a short-term working capital loan

Answer

B. A discount a merchant is required to offer customers who pay digitally instead of in cash

Answer

C. A charge levied by a bank on a merchant for accepting customer payments through the bank's debit or credit cards

Answer

D. The processing fee the RBI charges banks for settling interbank digital transactions