MDR regulatory interventions

Following two previews studies on the Acquiring and Acceptance industries, this report examines the impact of regulatory interventions on Merchant Discount Rates (MDR) in the acquiring segment of the payment value chain in emerging economies. Although policymakers introduce such initiatives to promote payment acceptance and competition, research from the countries studied suggests that they do not seem to achieve their objectives. This report investigates whether MDR caps effectively promote point-of-sale (POS) terminalisation and greater adoption of digital payments by consumers and merchants or whether other factors have a greater impact on developing card payment acceptance. Based on interviews with in-country industry experts and analysis of acceptance and economic market data, this study evaluates MDR regulation in Nigeria and Iraq. Detailed assessments and analysis of our findings are provided for each country.