Why MDR on the contract differs from what you book
Blended rates, FX points, and reserve releases quietly reshape gateway fee reports — here is what to check before renegotiation.
Merchant discount rates look simple in a term sheet. Inside a payment gateway application, the same rate can fragment across methods, currencies, and holdbacks until the P&L line no longer resembles the contract.
Blended is not broken — but it must be mapped
Some processors quote a blended MDR that already folds in interchange estimates. Others pass interchange through and add an acquiring margin. Your fee report should say which model applies. If it does not, finance cannot tell whether a spike is volume mix or a true rate change.
FX hides in “local” settlements
We regularly see THB-labelled deposits that cleared through an overnight USD leg. The gateway fee report may show a quiet FX markup without a dedicated column name. During a fee assessment we rebuild a sample with the currency of clearing, not only the currency shown to the shopper.
Reserves are not fees — until they are released wrong
Rolling reserves reduce cash but should not hit fee expense when held. Problems appear when releases return incomplete or when chargeback holdbacks age without a clear owner. Track reserve balances as balance-sheet items with a gateway reference ID.
Before you renegotiate
Export three months of fee reports, pick one week of raw transactions, and attempt to reconcile by hand for a single method. The gaps you find are the agenda for commercial talks — and for a formal Fee & Ledger Assessment if the numbers stay noisy.