Discount Rate

Merchants are charged a fee for the processing services that enable them to accept cards as payment. This fee, called the “merchant discount” or “discount rate,” is negotiated with each merchant during the sales process. The discount rate is usually a percentage of the merchant’s sales volume.

Related Terms

  • Business Day

    Refers to any weekday with the exception of federal holidays.

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  • Settlement Date

    The date an exchange of funds will be reflected on the books of the Federal Reserve Bank.

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