Rates and Fees

A merchant account has a variety of fees, some monthly, others charged on a per-item or percentage basis. Some fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card issuing bank according to a schedule of rates called interchange fees, which are set by Visa, Discover, and MasterCard. These card providers break the processing rates into three categories: qualified, mid-qualified, and non-qualified.

Processing category fees vary depending on the card type and the circumstances of the transaction. For example, if a transaction is made by swiping a card through a major bank debit card with a VISA logo, the credit card is most likely eligible for a qualified rate versus a credit card tied to cash-back reward or airline points will most likely be classified as mid or non-qualified rate.

It's not possible to tell by looking at the credit card whether it will be processed as qualified, mid-qualified, or non-qualified.

Accepting credit cards at your business comes with a cost...but that's the cost of doing business. Don't trip over dollars to save nickels.

Below is a brief description of what Qualified, Mid-Qualified, and Non-Qualified credit card rate categories are.

Qualified Rate

A qualified rate is the percentage rate a merchant will be charged whenever they accept a regular consumer credit card and process it in a manner defined as "standard" by their merchant account provider using an approved credit card processing solution. This is usually the lowest rate a merchant will incur when accepting a credit card.

Example of a 'qualified' card:

  • A personal debit or credit card that has no rewards tied to it

Mid/Non-Qualified Rate 

A mid/non-qualified rate is the percentage rate a merchant will be charged whenever they accept a credit card that does not qualify for the lowest rate (the qualified rate). The card issuer will determine whether the card will be processed as either mid or non-qualified. It's likely that the majority of your cards will fall into the mid or non-qualified category. 

Examples of 'mid/non-qualified' cards:

  • A mismatched billing address verification

  • A special kind of card like a rewards, corporate or business credit card

  • A personal credit card keyed into a credit card terminal instead of being swiped