What is a discount rate?
The processing fee associated with a Merchant Account. It is the percentage of the gross transaction amount that the bank/processor deducts prior to transferring the deposit into your bank account. Typical Discount Rates offshore range from 3 to 10% of transactions, depending on your type of business and various other factors determined by the specific bank and/or processor at time of underwriting. High volume and/or low risk accounts may qualify for lower Discount Rates. Already well established businesses with good processing history can also qualify for a lower Discount Rate.
A discount rate is a percentage of each transaction charged to the merchant. The discount rate charge is adjusted based on the risk factor. When the credit is present at the time of sale the discount rate is the lowest and higher when the card is not present for it carries more risk of fraud and chargeback.
