Non-Qualified Rate Definition

Non-Qualified Rate Explained:

What is a Non-Qualified Rate? The Non-Qualified rate is most often found in three-tier merchant account pricing schemes, with the other two tiers referred to as “Qualified” and “Mid-Qualified.” This fee is often referred to in the credit card processing industry as a “Non-Qualified Transaction Fee” or “Non-Qualified Downgrade Fee,” or just as “Non-Qual.” This fee is actually a surcharge that is added on top of the base tier (Qualified Rate) for certain card types, transaction methods, and merchant mistakes.

The Non-Qualified surcharge is the most expensive of the tiers and can cost merchants an average of 1.5% -2.5% on top of the Qualified rate. Generally, merchant account providers apply Non-Qualified fees because of the customer used a corporate card, foreign credit card or a certain rewards card. The Non-Qualified is also often used as a “catch all” tier for card types that cannot be identified correctly during the transaction processing. Additionally, the Non-Qualified surcharge may be applied to retail merchants that type in a transaction instead of swiping it, and/or to all transactions if a merchant fails to “batch out” at the end of the business day.

Learn how everything thing you need to know about rates and how to get the lowest fees from any provider in “Fee Sweep: How to Get the Merchant Services You Need Without Getting Scammed.”

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Hi, I’m Phillip and I’m disgusted by the state of credit card processing in the U.S. and abroad. I believe that the industry has been overrun by people who engage in fraud and deception in order to steal money from hard working business owners. I’ve made it my mission to expose the companies and individuals who engage in predatory marketing, pricing, and contracts, or just provide terrible service. Along with uncovering the bad guys, I’ve also discovered the good guys who do stand out from the status quo. CPO is a website where you will find ratings and reviews of these companies along with advice on how to save money and which service providers consider. Together we can move the industry in a positive direction. If you would like to help support my work, please checkout “Fee Sweep” my eGuide to getting the lowest possible fees when accepting card payments. If you haven’t heard of “interchange” this advice will save you hundreds, even thousands, in processing fees.

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