Every time a customer swipes, taps or inserts their card, the payment may go through in seconds, but the costs behind that transaction aren’t always as straightforward. From PoS machine charges and MDR to decline fees you might not even notice, these expenses quietly impact your margins every single day.
For store owners, understanding PoS machine charges isn’t just about knowing what shows up on your statement; it’s about spotting where money leaks happen and how to control them. In this blog, we break down the different types of PoS machine charges, explain how MDR works and uncover why declined transactions can still cost you, so you can make smarter decisions for your business and protect your profitability as you grow.
What are PoS machine charges?
Put simply, PoS machine charges are the costs you pay for accepting digital payments.
Any time a customer pays using a card or wallet, multiple systems work in the background to authorise, process and settle that payment. The fees linked to this process are what merchants see as PoS charges.
Some of these costs are fixed, like the fee for using the PoS terminal itself. Others depend on how customers pay, how often they pay and the terms agreed with your payment provider. Over time, these charges become a regular operating cost, much like rent or utilities.
Most PoS-related costs fall into three broad buckets:
- Charges for the PoS machine
- Merchant Discount Rate (MDR)
- Fees linked to declined transactions
What is MDR, and why does it show up on every card payment?
MDR, or Merchant Discount Rate, is the small percentage deducted from card transactions before the money reaches your bank account.
So if a customer pays ₹1000 and your MDR is 1%, ₹990 is what gets settled to you. It’s automatic, it happens in the background and because each deduction looks small, it’s easy to ignore.
MDR exists because card payments involve more than just your PoS machine. The customer’s bank, the card network and the payment processor are all part of the transaction. MDR is how these systems are funded and maintained, so payments remain fast, secure and reliable.
For merchants processing hundreds of transactions a day, MDR isn’t merely a fee. Instead, it’s a cost that scales directly with your business.
Why do PoS transactions decline, and why should you care?
A declined transaction is something many merchants have seen. The payment fails, the customer retries or switches to another mode.
Declines can happen for simple reasons: insufficient balance, expired cards, incorrect PINs or temporary network issues. What many merchants don’t realise is that some payment setups may still apply PoS decline charges, even when the transaction doesn’t succeed.
Too many declines can slow down billing, frustrate customers and point to underlying issues like connectivity problems or outdated systems. Over time, these small disruptions affect both customer experience and operational efficiency.
PoS machine fees: What you’re actually paying for
When you sign up for a PoS machine, you’re not just paying for a device that sits on your counter. You’re paying for everything that keeps it working smoothly, day after day.
Most PoS-related fees fall into a few common categories. There’s usually a one-time setup or installation cost to get the machine up and running at your store. Many merchants also pay a monthly rental fee, especially if the device is leased rather than purchased outright. This often covers basic maintenance and support, so you’re not left troubleshooting issues on your own.
Some providers also apply per-transaction charges, which are separate from MDR and apply every time a payment is processed. On top of this, there may be additional charges for services like software updates, machine upgrades or advanced support.
Individually, these fees may seem minor. But together, they shape the true cost of accepting digital payments, making it important to know exactly what you’re paying for, and why.
What influences how much you pay for PoS transactions?
PoS charges aren’t the same for every business. They change based on how customers pay and how your store operates.
Card type, payment network, transaction volume and even your business category can influence the final cost. Higher volumes may unlock better pricing, while certain cards or payment methods naturally carry higher fees.
This is why understanding your payment mix matters. It shows you where most of your costs are coming from and where adjustments can make a difference.
A clearer way forward for growing merchants
Understanding PoS machine charges puts you in control of your payment costs. When you know how different fees work, it’s easier to choose the right setup, avoid unnecessary expenses and ensure digital payments support your margins rather than erode them.
Every business accepts payments differently. Factors like payment methods, transaction volumes and the type of PoS terminal all play a role in what you end up paying. That’s why it’s important to use solutions that are built around how your store actually operates.
At Pine Labs, we help merchants simplify digital payments with reliable PoS solutions designed for everyday business needs. If you’re looking for a clearer, more efficient way to manage payments as your business grows, explore our PoS offerings at https://www.pinelabs.com.