Merchant Accounts, Credit Card Processing, Credit Cards, Internet Commerce, E-Commerce, Credit, Finance, Money

Interchange are the base rates dictated by Visa and MasterCard from which all merchant account providers markup their rates.

Interchange is made up of varying tiers. These tiers describe costs for different kinds of credit cards when processed under different kinds of circumstances. For example, a check card costs less then a consumer credit card which costs less then a business card.

The method of how a credit card is processed changes which tier of Interchange is applied. For example, a swiped credit card costs less to process then one keyed into a credit card terminal.

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 that is acceptable with their acquiring bank. This is the lowest rate a merchant will incur when accepting a credit card.

The Qualified Rate is also the rate commonly quoted to a merchant when they inquire about pricing.Mid-Qualified RateAlso known as a Partially Qualified Rate, the Mid-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). This may happen for several reasons such as:

- A consumer credit card is keyed into a credit card instead being swiped.
- A special kind of credit card is used like a rewards card or business card.
- A Mid-Qualified Rate is usually 1.00% - 1.50% higher then a Qualified Rate. Mid-Qualified Rates only apply to retail businesses.
- Mail Order, Telephone Order, and Internet businesses do not have a Mid-Qualifed Rate.

Non-Qualified Rate
The Non-Qualified Rate is the highest percentage rate a merchant will be charged whenever they accept a credit cards. All transactions that are not Qualified or Mid-Qualified will fall to this rate. This may happen for several reasons such as:

- A consumer credit card is keyed into a credit card instead being swiped and Address Verification is not performed
- A special kind of credit card is used like a business card and all required fields are not enterred
- A merchant does not settle their daily batch within the allotted time frame
- A Non-Qualified Rate is usually 1.00% - 2.50% higher then a Qualified Rate.

Authorization Fee
The Authorization Fee is charged each time a transaction is sent to the acquiring bank to be processed. Even if the transaction is declined this fee is assessed.

Statement Fee
The Statement Fee is a monthly fee associated with the monthly statement that is sent to merchant at the end of each monthly processing cycle. This statement shows how much processing was done by the merchant during the month and what fees were incurred as a result.

Monthly Minimum Fee
The Monthly Minimum Fee is a way to ensure that merchants pay a minimum amount in fees each month. If a merchant's Qualified Fees do not equal or exceed the Monthly Minimum they will be charged up to the monthly minimum to satisfy their minimum fee requirements.

Example: A merchant has a $25.00 monthly minimum fee. Their Qualified Fees for their most recent complete month of processing total only $15.00. This merchant will be charged an additional $10.00 to meet their Monthly Minimum requirements. Contrary to what some sales agents will try to make merchants believe, the Monthly Minimum fee is not required by Visa or MasterCard.

Batch Fee
A batch fee is charged to a merchant whenever the merchant "settles" their terminal. Settling a terminal, also known as "batching", is when a merchant sends their completed transactions for the day to their acquiring bank for payment. This special transaction may incur an extra fee although not all providers charge this fee.

Chargeback Fee
If a merchant encounters a chargeback they may be assessed a fee up to $25.00 by their acquiring bank. This fee is typically charged whether the chargeback is successful or not and is not dependant on the amount of the chargeback.