Merchant Discount Effective Rate Calculator
Audit realized processing fees against caller net settled sales after refunds, not existing hypothetical interchange/blended model comparison; reserves, taxes and other settlement adjustments are outside this observed-rate denominator.
Description
Realized merchant discount compares observed processing fees with sales net of refunds.
Realized merchant discount compares observed processing fees with sales net of refunds. Other settlement deductions need a different denominator.1
The returned values include Net processed sales minor, Total observed processing fees minor, Effective observed merchant discount percent, Modeled net merchant settlement minor. The How section below explains the calculation, input rules and interpretation.
When to use Merchant Discount Effective Rate Calculator
Use Merchant Discount Effective Rate Calculator when you need to evaluate the supplied records under the calculation and evidence rules below. Reserves, taxes, hypothetical interchange schedules and other settlement adjustments are excluded.
Prepare observed financial records and verified caller terms. Use one currency for integer minor-unit money and preserve leading zeros in identifier text. One basis point is 0.01 percentage points. Resolve dates, local clocks, counting rules and evidence flags as specified.
How to use Merchant Discount Effective Rate Calculator and understand its results
- Prepare observed financial records and verified caller terms. Use one currency for integer minor-unit money and preserve leading zeros in identifier text. One basis point is 0.01 percentage points. Resolve dates, local clocks, counting rules and evidence flags as specified.
- Enter observedSettledSalesMinor, observedRefundsMinor, observedProcessingFeesMinor using the field table and calculation rules, then run the tool.
- Read netProcessedSalesMinor, totalObservedProcessingFeesMinor, effectiveObservedMerchantDiscountPercent, modeledNetMerchantSettlementMinor. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| observedSettledSalesMinor | Observed settled sales minor | list of number | Required |
| observedRefundsMinor | Observed refunds minor | list of number | Required |
| observedProcessingFeesMinor | Observed processing fees minor | list of number | Required |
Enter independent nonnegative safe-integer sales, refund and fee lists, which may be empty or of different lengths. Require positive pooled net sales and checked sums. Return net sales, fees, effective percent and signed modeled settlement.
netSales=sum(sales)−sum(refunds); rate%=100sum(fees)/netSales; settlement=netSales−sum(fees) Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| netProcessedSalesMinor | Net processed sales minor | number |
| totalObservedProcessingFeesMinor | Total observed processing fees minor | number |
| effectiveObservedMerchantDiscountPercent | Effective observed merchant discount percent | number |
| modeledNetMerchantSettlementMinor | Modeled net merchant settlement minor | number |
{
"input": {
"observedSettledSalesMinor": [
10000,
20000
],
"observedRefundsMinor": [
1000
],
"observedProcessingFeesMinor": [
300,
100
]
},
"output": {
"netProcessedSalesMinor": 29000,
"totalObservedProcessingFeesMinor": 400,
"effectiveObservedMerchantDiscountPercent": 1.3793103448275863,
"modeledNetMerchantSettlementMinor": 28600
}
}Limitations and assumptions
Reserves, taxes, hypothetical interchange schedules and other settlement adjustments are excluded.
Numeric inputs, where present, must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Numeric lists are limited to 10,000 entries; string lists to 128 strings of at most 128 characters each. The rules above may impose smaller limits. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Rewards Effective Value Percent Calculator: Realized reward value must be compared with observed eligible spend after allocated fees. Net reward value can be negative. For a complementary task, use Net Interest Margin NIM Calculator: Net interest margin uses net interest income over time-weighted earning assets. Annualizing by the represented period differs from using an end balance.
References
Similar or alternative tools
- Rewards Effective Value Percent Calculator
Realized reward value must be compared with observed eligible spend after allocated fees. Net reward value can be negative.
- Net Interest Margin NIM Calculator
Net interest margin uses net interest income over time-weighted earning assets. Annualizing by the represented period differs from using an end balance.