The merchant discount rate (MDR) is the fee a merchant pays to accept a payment, usually quoted as a percentage of the transaction. To reduce payment costs in Singapore, compare the percentage, fixed charges and payment mix together, then check the actual fees against the matching sales volume.
For a cafe, hawker stall or retailer, a small fixed fee on every purchase can matter as much as the headline percentage. This guide uses original worked examples and RewardlyPAY’s published in-person rates to help you request a useful quote and review the bill after checkout.
What are RewardlyPAY’s published card and PayNow rates?
As checked on 25 October 2026, RewardlyPAY publishes these indicative starting rates for in-person payments. They provide a starting point for a discussion about your business, rather than a complete fee schedule.
| Merchant category | Card payments | PayNow payments |
|---|---|---|
| Standard merchants | From 1.8% | From 0.5% |
| Eligible hawkers | As low as 1.2% | As low as 0.4% |
Rates depend on merchant approval, eligibility and the merchant agreement. Ask which card types, transaction conditions, additional charges and taxes apply. Do not assume that an in-person starting rate covers online payments, every card scheme or international cards. Hawker eligibility must be confirmed for your business.
What does an MDR quote actually include?
Card acceptance involves several parties. Adyen’s explanation of interchange fees distinguishes the issuer’s interchange, card-scheme fees and the acquirer’s markup. The provider’s commercial offer determines how these costs appear on your bill. A blended rate can combine components; an interchange-plus quote can list them separately.
When asking for a lower rate, negotiate the terms your provider can change and compare the total payable. Do not add interchange or scheme fees a second time if the quoted price already includes them. Conversely, do not assume that a prominently advertised percentage includes every line item.
How to calculate effective MDR from a monthly statement
Use transaction fees divided by the corresponding processed payment volume, multiplied by 100. Keep the month, payment channel and tax basis consistent. Dividing card fees by all shop sales, including cash, understates the cost of accepting cards.
Effective transaction-fee rate = transaction fees ÷ matching payment volume × 100
Consider a fictional merchant processing S$60,000 of card payments across 1,500 transactions. Assume a quote of 2.3% plus S$0.05 per transaction, with S$120 in separate payment-related monthly charges. These are hypothetical figures, not a RewardlyPAY offer.
| Cost item | Calculation | Amount |
|---|---|---|
| Percentage fee | S$60,000 × 2.3% | S$1,380 |
| Fixed transaction fees | 1,500 × S$0.05 | S$75 |
| Total transaction fees | S$1,380 + S$75 | S$1,455 |
| Separate monthly charges | S$120 | S$120 |
| Total payment acceptance cost | S$1,455 + S$120 | S$1,575 |
The transaction-fee rate is 2.425%, or about 2.43%. Including the assumed monthly charges gives an all-in acceptance cost of 2.625%, or about 2.63%. If you allocate setup or hardware costs, state the period used. Include only the relevant portion of a shared subscription and identify any refunds, disputes or taxes separately.
Why a lower percentage can cost more on small purchases
Compare two fictional quotes using the same transaction value: Quote A charges 2.0% + S$0.08; Quote B charges 2.5% + S$0.02. Neither is a real provider offer. Before other charges, the results are:
| Purchase value | Quote A fee | Quote B fee |
|---|---|---|
| S$8 | S$0.24 | S$0.22 |
| S$12 | S$0.32 | S$0.32 |
| S$30 | S$0.68 | S$0.77 |
The two fees are equal at S$12. Below that value, Quote B is cheaper despite its higher percentage; above it, Quote A is cheaper. A bakery selling many S$8 items and a restaurant taking S$30 payments should therefore compare their own transaction counts and basket sizes. Check rounding rules in the actual contract.
Budget for the card and PayNow mix you actually receive
For a separate illustration, suppose S$22,000 of eligible in-person card sales are charged at an agreed 1.8%, and S$18,000 of eligible PayNow sales at an agreed 0.5%. The percentage-fee calculation is:
| Payment method | Payment volume | Percentage fees only |
|---|---|---|
| Cards | S$22,000 | S$396 |
| PayNow | S$18,000 | S$90 |
| Combined | S$40,000 | S$486 |
That is S$486 on S$40,000, or 1.215% (about 1.22%), before any additional fees and taxes. It is a planning example using the published standard starting percentages, not an all-in quote or a savings promise. Change the volumes and agreed rates to reflect your own customers; retain the payment choices they need.
Is PayNow free for merchants, and can you add a surcharge?
Consumer pricing and merchant service costs are different. A bank or payment provider may charge a merchant for PayNow-related services. In its 5 June 2026 merchant FAQ, the Association of Banks in Singapore states that merchants must not impose a PayNow surcharge or charge PayNow customers more than customers using other available payment methods. It treats those service costs as business overhead.
Build acceptance costs into your operating budget. Do not add a PayNow handling fee at checkout or disguise it as another payment-specific charge. Check proposed payment promotions against the applicable rules and merchant agreement before launching them.
Where RewardlyPAY can make the daily work easier
An attractive rate still needs a workable checkout. With a supported setup, RewardlyPAY connects to Rewardly POS or a compatible POS so the payment amount can pass to the terminal, reducing re-entry. Confirm your POS version, terminal, payment methods and refund workflow during the demonstration. Read our integrated POS payments guide for the day-end handoff.
Rewardly’s Payment Reports documentation describes tender summaries, CSV or Excel exports, and a PayNow Payout Report with fees and net payouts. Use these alongside the payment provider’s invoice and settlement statement. Match the period and outlet, then investigate differences before treating a bank credit as final sales revenue.
The card-payment setup guide and PaymentOS overview distinguish enabled gateways and payment methods from merchant-created manual tenders. Confirm which services are activated for your account. Ask for payout timing, refund costs and settlement terms in writing; a fast customer payment does not by itself establish your provider’s payout schedule.
Keep loyalty benefits separate from MDR savings
Rewards can give customers a reason to return, but they do not automatically change your processor’s rate. On a S$12 purchase, the percentage-fee difference between an agreed 1.8% and 0.5% is S$0.156, about S$0.16, before other charges. A S$0.50 reward costs more than that fee gap. Judge it against contribution margin and subsequent visits, not payment savings alone.
Rewardly’s eligible card-linked loyalty setup can connect payment and rewards. Confirm supported cards, enrolment, customer consent and reward rules. Use LoyaltyOS to shape a useful member benefit and PaymentOS reports to review payment costs; keep the commercial assumptions visible in both decisions.
What to send when requesting an itemised payment quote
A short, consistent brief makes competing offers easier to compare. Send the same information to each provider and ask for a written breakdown:
- Your monthly payment volume, transaction count and typical basket size, separated into cards, PayNow and other methods.
- Your in-person and online channels, outlets, local and international card mix, and any hawker eligibility question.
- Percentage and fixed fees, minimum charges, terminal or software costs, setup costs, taxes, refund and dispute charges, and contract or exit terms.
- Supported POS and terminal combinations, enabled payment methods, payout timing, reporting access, reconciliation steps and support arrangements.
Then test a sale and a refund, review the first statement and repeat the calculation after a representative trading month. A negotiated percentage helps only when the complete agreement fits your transactions and your team can run it reliably.
Request an itemised RewardlyPAY quote with your payment mix and current statement. We can review suitable in-person options and the POS connection your business needs.
Sources and calculation notes
Product rates were checked on 25 October 2026 against the RewardlyPAY in-person payments page. Operational features follow the linked Rewardly support guides; PayNow surcharge guidance follows ABS’s dated FAQ. All numerical scenarios in this article are original illustrations. Compare signed terms on the same tax basis before making a commercial decision.
