What is the ruling on a merchant's transaction in which he discounts $11,000 from his customer's debt of $40,000, in exchange for the customer paying him $10,000 in cash upfront?

This transaction is considered usury (riba) and is impermissible in Islamic law according to the majority of the four Imams. It falls under the rule of "give discount for prompt payment" (da' wa ta'ajjal), which means waiving a portion of a debt in exchange for accelerated payment of another portion. Many Companions and jurists have disliked this practice.