If you’re processing credit card payments, you need to understand the different types of payment processing rates. Qualified, mid-qualified, and non-qualified are terms that you might not be familiar with, but they have a major impact on your business. Mid-qualified and non-qualified payment processing refer to the pricing for when your company processes transactions from certain types of credit cards. When it comes agents receive a mid-qualified rate, they are accepted by some merchants but not others. Non-qualified payment processing refers to when an agent receives a lower rate than a mid-qualified rate because their card is not accepted by enough merchants. Qualified and non-qualified rates can be confusing because they indicate how likely or unlikely a customer or transaction is to meet the threshold for offering lower rates. Let’s take a closer look at what these terms mean and how they can impact your business.
What does qualified mean?
Qualified means that a business is able to offer lower rates because they have met the minimum requirements set by their processor. This can happen if a business has been in operation for at least two years and has less than $1 million in income or if they are a MasterCard or Visa authorized user. A qualified payment processing rate will typically be lower than non-qualified, but it’s also possible that the rate may not be lower.
What does non-qualified mean?
When you process credit card transactions that are not qualified, the lower rate is computed based on a few factors. The type of transaction: A transaction that is non-qualified might be a purchase or a cash advance. The amount of the transaction: Most transactions processed as non-qualified are for amounts less than $10,000. The acceptance of your business: The business needs to accept your card in order to get the lower rate. For example, if only one branch accepts your card, it will be non-qualified.
What is mid-qualified rate?
A mid-qualified rate is a type of payment processing that is accepted by some merchants but not others. When an agent receives a mid-qualified rate, they are accepted by some merchants but not others. The marketer can choose to accept the mid-qualified rates or reject them. If your business accepts all qualified rates and rejects the non-qualified rates, you’ll be charged a higher processing fee. On the other hand, if your business rejects all qualified rates and accepts the non-qualified rates, your business will receive less revenue from this type of credit card transaction.
Qualified and Non-Qualified Rates
Qualified rates are the best rates available and are offered to companies that process a certain amount of transactions per month. In order to qualify for this rate, your company must meet certain requirements that are based on the number of transactions you process. For example, if you process at least 10,000 transactions in a month you would receive qualified rates. Your company is also offered non-qualified rates when it processes less than 10,000 transactions per month. Non-qualified rates are less beneficial than qualified rates because they offer lower transaction thresholds. For example, if your company processes 2,500 transactions or less in one month it will receive a non-qualified rate. A high volume of monthly transactions is needed before qualifying for the qualified rates or the non-qualified rate. Additionally, a merchant is not guaranteed to have at least two or three types of credit card acceptance when they receive non-qualified rates.
When your company is using a card that has a mid-qualified rate, the payment processing rates are determined by the amount of transactions that you process with this card. The card must be accepted by enough merchants to meet the threshold and receive a lower rate. If the card has accepted by more than five percent of all the merchants in an industry, then it receives a lower rate.
If an agent receives a non-qualified rate, their card is not accepted by enough merchants to receive the low rates that they qualify for. So they are not precluded from getting paid as much as they would have if they had received a qualified or mid-qualified rate.
Understanding both Qualified and Non-Qualified rates
Qualified rates are offered when a company is accepted by enough merchants to use the lower rate. For example, if your company’s credit card is accepted at 85% of the stores in its network, you would receive a qualified rate. Qualified rates typically start at 1% and go up to around 4%. Non-qualified rates are offered when a company’s credit card is not accepted by enough merchants. If your card is only accepted by 50% of the stores in your network, you would receive a non-qualified rate. Non-qualified rates tend to start as high as 5% and go down to 0%. To determine which type of payment processing rate you should receive, you need to know how many stores accept your credit card. If you process more than 85% of all transactions on your credit card network, you will be qualified. If less than 50% of all transactions on your credit card network are processed with your card, the most likely outcome would be that you would be receiving a non-qualified rate.
What is a non-qualified rate?
Non-qualified rates are what you might pay for transactions that do not meet the threshold for a lower rate. If your card is mid-qualified, you will be charged less than non-qualified rates. An example of this is if someone buys a product from you with a non-qualified rate, they are more likely to pay full price and not get anything back in return.
How do you get a non-qualified rate?
Qualified rates are applied to transactions that meet the thresholds set by the card networks. If a transaction doesn’t meet those thresholds, it is considered non-qualified. When an agent is paid at a non-qualified rate, they are only paid for transactions that do not meet the card network thresholds for qualified rates. Let’s say your company processes 5,000 transactions in a month. Your company will be charged for 50 transactions at a non-qualified rate which means 20% of your total payments will be processed at this rate.
How do you get a qualified rate?
If you have a qualified rate, you will only have to pay a processing fee of 2.9% on each transaction. Qualified rates are given when the Visa® or MasterCard® brand logos are present on your merchant gateway. You can earn a qualified rate by providing merchants with some form of cardholder data, like name, address, and phone number. For example, if you’re packing orders in-store, giving customers your phone number is a way to provide this information.
There are two different rates for payment processing, qualified and non-qualified. To get a qualified rate, you will need to pay a fee to the card provider, typically 1.87% of the transaction when it is processed by VISA. The fee for a non-qualified rate is typically 3.5% and is also charged by the card provider. There is an intermediary rate that is also held by the card provider, but it is not yet clear what this rate is.
What are qualified, mid-qualified, and non-qualified payment processing rates?
Qualified, mid-qualified, and non-qualified payment processing rates refer to the pricing for when your company processes transactions from certain types of credit cards. When it comes agents receive a mid-qualified rate, they are accepted by some merchants but not others. Non-qualified payment processing refers to when an agent receives a lower rate than a mid-qualified rate. Qualified and mid-qualified payments processing refer to when merchants accept all credit cards from your company.
Qualified: Qualified payments processing refers to when your company processes credit card transactions through a merchant account network (MAM). For example, if your company processes credit card transactions for Whole Foods and other chains through their Authorized Merchant (AM) program, you would be qualified for this type of payment processing. Qualified payments processing usually requires lower rates than either non-qualified or mid-qualified payments processing.
Mid-qualified: Mid-qualified rates are usually what most small businesses can afford. Merchants can accept your company’s credit cards at this rate, but they might not be the best choice for them. For example, if your company processes credit card transactions for Starbucks or Bed Bath & Beyond at their stores, you would be qualified for this type of payment processing.
Non-qualified: Your business does not meet the requirements needed to qualify for non-qualified payment processing. This type of payment processing is typically only available for businesses that do not have any relationship with merchants in the merchant account network (MAM).
What are the benefits of qualified and mid-qualified payment processing rates?
Qualified and Mid-qualified processing rates are the best rates that you can get when placing credit card processing orders with a third party processor. In order to get these great rates, you need to have a solid relationship and relationship with the processor.
With a qualified processor, this means that your company is verified, experienced, and trustworthy. A qualified processor will charge a lower rate than a non-qualified processor, but they will also require more security measures to ensure the safety of your customers data.
With mid-qualified processr, this is where you get the best of both worlds. Not only are they qualified, but they are also guaranteed business from the merchant you are processing for.
These rates can be found through processors like Fetch Financial, Stripe, and Authorize.Net to name a few.
What are the benefits of non-qualified payment processing rates?
As a credit card processor, you have three payment processing options to choose from: qualified, mid-qualified, and non-qualified.
Qualified is the best option for credit card processing companies; it provides the most favorable rates and best customer service. Qualified payment processing rates are set and determined by the credit card brands themselves. If you want to ensure that your processor gets the best pricing possible, you need to work with a company that is partnered with the right brand.
Mid-qualified payment processing rates are less favorable than qualified rates, but still more favorable than non-qualified rates. Processing companies that are mid-qualified are accepted by some merchants but not others. The best way to ensure that you get top rates is to partner with an experienced processor who has relationships with all of the major brands.
Finally, non-qualified payment processing is the slowest option because it is only accepted by a limited number of merchants. If you want to get the most out of your credit card processing program, then you need to go with non-qualified or mid-qualified processing.