Do you ever wonder why you are being charged extra fees for processing credit cards? These fees are called Mid-Qualified or Non-Qualified fees and you could be paying an additional 2-3% more just because the way you (or another worker) runs credit card payments through your terminal. Some merchant accounts are not setup correctly either, which could make ALL your transactions downgrade.
Swiped accounts should be setup to auto-batch every day. If swiped transactions are not cleared within 24 hours of authorization, they are no longer “qualified” and you are charged a higher rate. Keyed or ecommerce accounts should be batched within two days of authorization and you must perform an AVS (Address Verification) on the zip code. If you don’t do this, the transaction is no longer qualified.
Although, these are processing guidelines to achieve a qualified transaction, the type of credit card can determine whether it becomes a “non-qualified” transaction even if you do your part as described above. Rewards cards and business credit cards are considered non-qualified cards and are charged the higher rate.
Be very careful about doing business with sales people that are only interested in making some upfront commission on your account as they usually do not provide any customer service after they have setup your merchant account. They do not have your best interest in mind.
Don’t be enticed to accept the lowest rate either. That low rate may be a teaser rate that you will never see. For instance, if you compare a rate of 1.65% to 2.19%, the lower rate seems like the way to go, right? But if you take orders over the phone or Internet, you will never pay the lower rate, you will always be charged the mid-qualified rate stated on your contract. This mid-qualified rate is usually .70%-1.35% higher (i.e. 2.35%-3.0%). However, your merchant acccount should be setup as a MOTO (mail order telephone order) account, not a Retail account. The MOTO account qualified rate of 2.19% is lower than the mid-qualified rate example. If you are not working with a reputable Account Manager, this could cost you a lot of extra money in fees.
I hope this information is helpful. If you have any questions or comments about this post, please contact me. I will be happy to do a free statement analysis of your merchant account and tell you how I can lower your fees. I also provide personal customer service for all my accounts and our corporate office provides 24/7 customer service and technical support.
Have questions?
Please email info@ubcse.com or call me at 1-800-993-8942
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