Saturday, January 10, 2009

Merchant Account Fees

There are many different kinds of fees that go into credit card processing that the merchant may have to pay. Knowing the different types of fees can save you money.

Discount rates
The discount rate is the fee the merchant pays per transaction. There are different rates depending on the type of transaction.

Qualified rate
The lowest rate. This usually requires that the cards be electronically swiped and the transaction settled within 24 hours. Also known as Swipe rate.

Mid Qualified rate
This is the percentage rate merchants are charged whenever they accept credit cards that do not qualify for the lowest rate. Here are some reasons why this can happen.
non-swipe transaction

  • non-swiped credit card transaction
  • foreign car, business card or rewards card
  • batch not done in a timely manner (24-48 hours)
Mid qualify is also known as a partially qualified rate.

Non Qualified rate
This rate will be the highest charged. Here are some reasons a transaction would fall into the non qualified rate.

  • non - swiped credit card, no address verification
  • foreign card, business card or rewards card, with no additional fields entered
  • batch not done in a timely manner (24-48 hours)

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