Acquirer Fees KPI

Acquirer Fees

The Acquirer Fees KPI quantifies the total fees a merchant pays to an acquiring bank for processing credit and debit card transactions, often referred to as the Merchant Discount Rate (MDR). This metric is typically expressed as a percentage of the transaction volume, combined with fixed per-transaction fees, and varies based on factors like card type, transaction value, merchant category, and regional regulations. For example, a merchant might pay 2% of each transaction’s value plus a $0.10 fixed fee. The fees encompass multiple components, including interchange fees (paid to the issuing bank), card scheme fees (paid to networks like Visa or Mastercard), and the acquirer’s service charges for processing, authentication (e.g., 3D Secure), risk management, tokenization, and gateway services.

For merchants, this KPI is critical as it directly impacts profitability, with high fees eroding margins, especially for low-margin businesses. For acquirers, fees are a primary revenue source but must balance competitiveness to retain merchants. Customers may indirectly face higher prices if merchants offset fees, affecting purchasing behavior. Monitoring this KPI helps merchants assess payment processing efficiency, compare acquirer performance, and identify opportunities to lower costs.