Offered a 1.8% MDR? What Your Restaurant Should Check

Start with the eligibility, not the percentage

You receive two terminal quotes. One is in the low 2% range. The other says 1.8%. The second looks like the easy choice.

If your restaurant already accepts Visa and Mastercard, ask one question before signing: what makes us eligible for 1.8%?

A 1.8% merchant discount rate (MDR) can be genuine. It may be supported by a programme for small or new merchants, limited to certain cards or subsidised for a period. The provider should be able to show you which condition applies.

Be wary when the explanation is simply “open a new company and we will handle the rest”. If the rate depends on your restaurant being treated as new, you need the bank behind the offer to confirm that status.

Why an existing restaurant may not be “new”

Visa and Mastercard do not set one retail MDR for every restaurant. The bank or payment provider behind your terminal sets the final rate. Interchange—the fee exchanged between the banks—is only one part of it, as Visa and Mastercard explain.

This leaves room for special rates, but those rates come with rules.

Some offers rely on the restaurant being “new to scheme”. That phrase only means something when you can see how the programme defines it. Ask for the programme name, the current eligibility schedule and the bank’s approval of your application.

If your outlet has taken Visa and Mastercard for years, changing terminal providers does not erase that history. The provider needs to show why the programme still applies to your restaurant.

A new UEN does not make the same restaurant new

Opening a separate company is normal when you launch a genuinely different business, bring in a partner or set up a new brand.

It is a warning sign when the only purpose is to make the same restaurant appear new.

Card acceptance is not tracked by UEN alone. The bank behind your terminal can also use merchant IDs, outlet and business details, transaction activity and merchant-category information when assessing an application.

If a provider recommends a new entity, ask it to obtain written confirmation from the bank that your existing brand, owners and outlets qualify under the proposed structure. A salesperson’s assurance is not the same as the bank approving your restaurant.

Check the fallback rate before you sign

Your merchant agreement should state what happens if the special rate ends or your eligibility is rejected. Depending on the contract, the provider may:

• move future transactions to its standard rate;
• bill you for the difference on earlier transactions;
• ask for documents covering ownership, outlets and previous card acceptance; or
• restrict or end card acceptance.

These outcomes are not automatic for every offer. The agreement decides what the provider can recover from you.

Look for the clauses covering rate adjustments, retrospective recovery, audits and termination. If the wording is broad, ask the provider to explain it against your exact quote.

Get these five answers in one email

Ask the provider to reply to these questions and point to the matching terms in your agreement:

1. What is the programme called, and what makes our restaurant eligible?
2. How did you check our previous Visa and Mastercard acceptance across every company and outlet?
3. Has the bank behind the offer approved this exact business structure?
4. What rate applies if the programme ends or our eligibility is rejected?
5. Can you bill us for earlier fee differences or pass other programme costs to us?

The quote should also show the fixed transaction fee, GST, domestic and foreign-card rates, hardware charges, settlement timing, chargebacks and termination terms.

Sometimes “1.8%” means 1.8% plus a fixed fee. An “effective 1.8%” may be based on an assumed bill size or card mix. Ask for the exact formula, but decide first whether the eligibility itself is sound.

What rate is realistic for an existing restaurant?

There is no single Singapore MDR for every restaurant. Current public card-terminal prices show why:

• HitPay lists 2.3% for domestic cards for F&B merchants, with a minimum fee of S$0.20.
• Oddle Terminal lists rates from 2.4% + S$0.08 per transaction.

These are public starting prices, not like-for-like quotes. Your actual rate will depend on card mix, volume, outlet setup and the services included.

For planning, the low-to-mid 2% range plus any fixed fee is more defensible for an existing restaurant than assuming a special 1.8% rate will apply.

Use the written fallback rate from each proposal in your budget. If a lower programme rate is approved, treat the difference as a saving.

For a wider look at terminal pricing and contract terms, read our guide to credit card terminals for Singapore restaurants.

If you are considering Oddle Terminal, ask us for a written quote based on your existing card history, outlets and Visa and Mastercard mix. Apply the same five questions to our proposal.

Related guides

• Best Credit Card Terminals for SG Restaurants — compare terminal pricing, hardware and other costs.
• Ultimate Guide to Restaurant POS Systems in Singapore — understand where card acceptance sits within your wider restaurant operation.
• How to Open a Café or Restaurant in Singapore — plan the systems and costs for a genuinely new outlet.