UPSC CSE Prelims
Question 28
Which one of the following best describes the term "Merchant Discount Rate" sometimes seen in news ?
View correct answer and explanation
Correct answer: C
Correct Option: C
Explanation: Merchant Discount Rate (MDR) is the merchant-side fee charged by acquirers/payment service providers for processing card transactions, often shared within the payment network.
Option-wise Analysis:
A: Incorrect - MDR is a fee paid by the merchant, not a bank incentive paid to the merchant.
B: Incorrect - Customer cashback is a different incentive and is not MDR.
C: Correct - Correct-MDR is the processing charge borne by the merchant for accepting card payments.
D: Incorrect - A government subsidy for digital payments is distinct from the merchant discount rate.