What is the difference between daily and monthly discount processing fees?

The distinction between daily and monthly discount processing fees primarily revolves around the timing and method of how these fees are deducted from transactions.

Monthly discounts are typically deducted in a lump sum at the end of the monthly billing cycle. This means that all the transactions processed throughout the month are aggregated, and the discount is applied once, resulting in a single deduction from the merchant's account. This can sometimes make it more difficult for merchants to track their transaction costs on a daily basis, as the fees are not readily apparent until the end of the month.

In contrast, daily discounts are charged continuously, meaning that the fees are calculated and deducted on a daily basis as transactions occur. This allows for a more granular view of transaction costs, as merchants can see how much they are being charged in real-time for processing fees every day.

Understanding this difference is crucial for businesses when managing cash flow and financial planning, making the correct answer – that monthly discounts are deducted in a lump sum while daily discounts are charged continuously – significant.