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What is MTOT Disc & Merchant Account Fees?

A merchant account total discount fee (or “MTOT DISC” for short) is a fee that is charged by merchant service providers for processing credit card transactions. The total discount fee is typically a percentage of the total transaction amount, and it is used to cover the costs associated with processing the transaction, such as the costs of authorization, settlement, and risk management.


The discount rate is the fee a merchant pays to their merchant services provider so that they can accept credit cards.

The rate typically consists of two parts: the interchange rate, which is set by the card networks (Visa, Mastercard, etc.), and the acquirer’s markup, which is the fee that the merchant services provider charges on top of the interchange rate. The total discount rate is the sum of these two parts.


For example: If a merchant has a total discount rate of 2.5% and they process a transaction for $100, the total discount fee would be $2.5.

Different providers will charge different rates, so it’s important to compare your merchant provider and switch if you can save money on these fees. We recommend switching credit card processing companies when necessary


There are also other fees associated with credit card processing including: statement fees, gateway fees, and chargeback fees. Most merchants will keep a watchful eye on these Payment processing fees to ensure they are not losing out on money.


Merchant Account Fees Explained

When it comes to accepting credit card payments, one of the most important aspects to consider is the fees associated with a merchant account. As a business owner, it’s important to understand the different fees associated with a merchant account and how they can impact your bottom line. In this blog post, we will break down the various types of merchant account fees and explain what they are and why they are charged.

The discount rate is made up of two parts: the interchange rate, which is set by the card networks (Visa, Mastercard, etc.), and the acquirer’s markup, which is the fee that the merchant services provider charges on top of the interchange rate.


Interchange Rate

An interchange rate is a fee that is set by the credit card companies like Visa and AMEX, and is charged to a merchant’s bank every time there a credit card has to be processed after a transaction. The acquiring bank (the merchant’s bank) then passes on this fee to the merchant, typically as part of the merchant’s total discount fee (or “discount rate”).

The interchange rate is intended to compensate the card issuer (such as a bank) for the costs of issuing and maintaining the card, as well as the risk of fraud (this is where high risk merchant account providers come in). The rate varies depending on several factors, including the type of card (e.g. credit card or debit card), the type of merchant (e.g. retail, e-commerce), and the type of transaction (e.g. swiped, keyed-in, or online).

Credit and debit card providers like Visa and Mastercard establish the interchange rate schedule and update it periodically.

Interchange rate is the biggest cost of accepting credit cards for merchants and it’s the largest component of the discount rate. Therefore, it’s important for merchants to be aware of the interchange rate and how it affects their discount rate. Knowing this will help merchants to compare the cost and choose the best merchant services provider that suits their needs.


Acquirer’s Markup

The acquirer’s markup is determined by the merchant services provider and it can vary. This fee covers the costs of providing the merchant with a merchant account and the necessary infrastructure to process credit card transactions such as terminals, payment software, customer support, risk management, and fraud prevention.

The acquirer’s markup, along with the interchange rate, both make up the total discount rate that a merchant pays for accepting credit card payments.

For example, if the interchange rate is 1.5% and the acquirer’s markup is 0.5%, then the total discount rate is 2%.


Other Fee Types

Another common fee associated with merchant accounts is the statement fee. This is a monthly fee that is charged for the privilege of having a merchant account and is typically a flat fee. It’s used to cover the costs of maintaining and managing the account, such as the cost of mailing out paper statements or providing online account access.

In addition to total discount fee and statement fee, merchant may have other types of fees such as gateway fee, chargeback fee, etc. Gateway fees are charged when a merchant uses a payment gateway to process transactions, and chargeback fees are charged when a customer disputes a transaction and requests a refund.


Understanding the various types of merchant account fees and how they are charged is an important aspect of accepting credit card payments. By understanding the costs associated with a merchant account, business owners can make more informed decisions when it comes to choosing a merchant services provider and can ensure that they are getting the best deal possible.


Ryan Kemp Zulu Shack Creative
( Director of Digital Marketing )

I am passionate about delivering results and helping my clients succeed. With my expertise in SEO, branding, and marketing, I lead the agency’s efforts to create and implement effective strategies that drive business growth. Our all-inclusive approach sets us apart from other digital media companies and ensures that our clients receive the full range of services they need for online success. If you can think of it, we can build it!

Zulu Shack Creative team members thrive on momentum. Like Zulu warriors, we strive to spearhead your idea with speed and quality.

When I’m not helping my team implement new digital marketing strategies, I enjoy playing music, hosting poker nights, reading Stephen King novels, and spending time with my wife and baby daughter.

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