Rate Qualification Guide

In order to know how much it costs to process your credit and debit card transactions, you must first know what transactions qualify at what rate categories – that’s why we’ve developed this rate qualification guide. Whether you process transactions in a traditional retail environment where the card is usually present or in a mail/telephone order or Internet environment where the card is not, this guide will help you understand those costs and, more importantly, keep them to a minimum.

Retail:

In a retail environment, the credit card is typically present and therefore processed by swiping it through a terminal.  While the credit card information can be key-entered into the terminal when the transaction is conducted over the phone or through the mail, the vast majority of transactions in a retail environment are swiped.  This is the least expensive environment to process a credit card because the signature of the person authorized to use the card can be verified.

There are three rate qualification categories in a retail processing environment – qualified, mid-qualified and non-qualified.
 

• Qualified is the lowest retail processing rate category.  In order for a transaction to qualify for this category, the credit card must be swiped through the terminal, the contents of the magnetic stripe transmitted and an authorization number received.  The transaction must also be settled or batched out of the terminal within 24 hours of the authorization.
  
  
• Mid-qualified is the lowest rate category in the retail processing environment for which key-entered transactions can qualify.  This category requires that the billing address of the cardholder be verified with a match of their zip code. Once again, an authorization number must be received and the transaction settled or batched out of the terminal within 24 hours of that authorization.
  
  
• Non-qualified is the highest rate category in the retail processing environment.  Generally speaking, this rate applies to key-entered transactions where the address is not verified with a zip code match or transactions that are not settled or batched out of the terminal within 24 hours of their authorization.
  
  

• Rewards Cards – The best category for which rewards cards can qualify is the mid-qualified category, even if they are swiped through the terminal.  With 20% or so of the cards in circulation being rewards, the typical retail merchant will have some mid-qualified transactions.
  
  
• Business Cards – While some business cards qualify at the mid-qualified rate category, the majority including MasterCard’s World card or Visa’s Signature card qualify at the non-qualified rate.
  
  
• Voice Approved Cards – Anytime a transaction is authorized by a call center and later hand keyed into the terminal, it will go to the non-qualified rate category.
  

• Qualified is the lowest mail/telephone order or Internet processing rate category.  The category requires a zip code verification attempt, an authorization number and a settlement or batch within 24 hours of the authorization.
  
  
• Non-qualified is the highest mail/telephone order or Internet processing rate category. The rate applies to transactions where zip code verification is not attempted or when transactions are not settled or batched out of the terminal within 24 hours of their authorization.
  
  

• Business Cards – While some business cards qualify at the qualified rate category, the majority including MasterCard’s World card or Visa’s Signature card qualify at the non-qualified rate.