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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