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

  • Merchant Account

    An account opened through a payment processor or financial institution that allows payees to accept credit card payments from a payer.

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  • TILA (Truth in Lending Act)

    The Truth in Lending Act requires the full disclosure of finance charges and terms with regard to costs associated with borrowing.

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