Qualified vs. Non-Qualified Transactions
As you may or may not know, many Merchant Services
Provider (MSP) will group your credit card transactions into
three general categories: Qualified, Mid-Qualified and
Non-Qualified. Each has its own processing rate.
When signing up for a credit card merchant account you
will typically hear about the lowest possible rate - the
Qualified rate. The MSP will then tell you what your Mid and
Non-Qual rates are. Sometimes there is no Mid-Qual rate at
all. It goes from Qual to Non-Qual. For example if your Qual
rate is 1.99%, your Mid-Qual rate may be 2.99% and Non-Qual
3.99% or even higher. And if you look at your most recent
merchant statement, you will see your standard interchange
rates and then Mid or Non-Qual fees in addition to that.
A lot of merchants think that they are paying the lowest
rate they signed up for, but they may be paying the Non-Qual
rates for every single transaction because they never ask
their customers for the billing address.
Although, it is up to your MSP to classify certain
transactions as Mid or Non-Qual, the following scenarios
will apply to the vast majority of transactions you process:
- Qualified: Personal cards, Offline Debit
Cards (being processed as non pin debit, swiped as a
credit card)
- Mid-Qualified: Typically Reward Cards and
Business Cards (Missing Address Verification)
- Non-Qualified: Typically Corporate Cards,
International Cards or (Missing address information,
missing tax information, missing customer code or order
number)
Not all reward cards go to non qualified rates, that's
just a setting by the MSP or Processor. With us, almost all
of them will go to Mid Qualified, not Not Qualified.
To reduce the amount of fees you pay, always get the
correct billing address and make sure to supply as much
information as you can about the transaction. Supplying just
the credit card number and the expiration date will almost
always earn you the Non-Qual rate. |
