Qualified Rate Explained:
What is a Qualified Rate? Also referred to in the credit card processing industry as a “Qualified Discount Rate” or “Qualified Transaction Fee,” this fee is found in tiered/bucket merchant account pricing schemes. The Qualified rate is usually part of a three-tier fee model with the other two tiers most often called “Mid-Qualified” and “Non-Qualified.” There are many variations of these tiers and associated names because there is no industry standard on how rates and fees can be structured or what they must be called.
The Qualified rate is often the only rate that is advertised or quoted to merchants because it is the lowest and most attractive fee. The quotes often look something like “1.59% + $0.10 per transaction,” but fail to mention that 50%, or less, of a merchants transactions will experience this low rate. The other 50+% will be charge at the higher Mid- and Non-Qualified tiers.
Merchant account providers primarily determine which rate tier a merchant will incur based on a customer’s card type. Generally, the only cards that fall into the Qualified tier are credit cards that do not have an attached reward program such as miles or points, and signature debit transactions where the debit card does not have an attached rewards program.
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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About Phillip Parker
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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