MDR (Merchant Discount Rate)

MDR, the Merchant Discount Rate, is the fee a payment gateway or aggregator deducts from each successful payment, usually expressed as a percentage (around 1.95-2% on cards in India), sometimes plus a flat per-transaction amount. It is how gateways make money.

In India, UPI and RuPay debit carry zero MDR for merchants under government policy in many cases, so UPI is often free or cheaper than cards. MDR attracts 18% GST on top.