There are seven merchant account types or categories, and which one your business falls into has implications for your pricing if you are priced using a tiered approach.
Tiered pricing offers a more nuanced fee structure for your account. Transactions are split into three tiers, based on how you process the card and how "risky" the transaction is deemed to be. The highest qualification tier has the lowest fees associated with it, and vice versa for the lowest qualification tier.
The best way to ensure that your transactions qualify for the rates you expect is to make certain you're following the rules and requirements for your account type laid out below.
Remember, a transaction has to meet ALL the criteria for a certain tier in order to qualify. For instance, for a retail transaction to be categorized as Qualified, a standard (non-rewards) consumer credit card must be physically swiped AND the batch must be settled within 24 hours.
Retail, Restaurant, Wireless, or Lodging
- The Qualified (lowest rate) applies to transactions where the card is physically swiped and the batch is settled less than 24 hours later.
- The Mid-Qualified rate applies to reward cards and batches settled in more than 24 hours.
- The Non-Qualified (highest rate) applies to corporate or government cards, enhanced reward cards, manually keyed transactions, and batches settled after 48 hours.
Face-to-Face or Mail Order/Telephone Order
- Qualified transactions are those in which the card is keyed in, the batch settles within 24 hours, and the AVS (address verification service) and order number are both entered.
- Mid-Qualified transactions are those involving reward cards and batches settled in more than 24 hours.
- Non-Qualified transactions are those involving corporate or government cards, enhanced reward cards, physically swiped transactions, transactions where the AVS or order number aren't entered, or batches settled after 48 hours.
- A Qualified transaction occurs when the card is run through an online shopping cart, the batch settles within 24 hours, and the AVS (address verification service) and order number are both entered.
- A Mid-Qualified transaction occurs when a reward card is used or the batch settles in more than 24 hours.
- A Non-Qualified transaction occurs when a corporate, government, or enhanced reward card is used, the AVS or order number is missing, or the batch is settled after 48 hours.