It is important for credit card merchants to understand the cost of credit card processing solutions. This is because; over the years, the merchant service industry has developed its own unique language and system. Being unaware of the language and system can prove costly to credit card processing merchants because; the credit card processing fees and the terms used to describe those fees are common among most processors. The terms can vary slightly to have different meanings depending with the processor. However, most processors choose sweet sounding and powerful words to indicate a cost. But remember, a cost by any other name is still a cost to the credit card processing merchant.
As a credit card processing merchant, you need to aware of the following usual terms and costs used by top credit card companies:
Discount rate: The discount rate is the fee that the acquiring bank will charge you. It includes the interchange rate that the acquiring bank pays to your bank when you accept the cards. Therefore, in a transaction, the discount rates together with any other transaction fees are collected from you by the acquiring bank.
Interchange-plus pricing: This is an alternative rate offered to merchants. It can be a wise choice pricing only available to knowledgeable merchants. In a nutshell, it's a fixed markup in addition to the actual processing charges, equating to actual cost of interchange in addition to a sizable fixed profit for the processor.
Qualified rate: This is the least possible rate payable by the credit card processing merchant at virtual merchant for any credit card transaction. They are normally charged for ordinary consumer credit card transactions and are usually swiped and the batch settled within 24 hours. It is a percentage rate that is charged to a credit card processing merchant standard transactions. What is standard transaction, however, varies from one processor to another.
Mid-qualified rate: This is charged for some of those transactions that do not merit the qualified rate. Credit card transactions that may fall in this category are those that would require keying in as opposed to swiping, and the batch may not be settled within 24 hours.
Non-qualified rate: This rate is applicable to all other transactions that do not fall under qualified rate or mid-qualified rate. It is the highest rate chargeable to a credit card processing merchant for credit card transactions. This rate is normally applicable on a situation where the card is not swiped, no address verification is sought, foreign, reward or business cards are used and the batch is not settled within 24 hours. Contact our merchant services dallas for any question regarding credit card processing.
https://en.wikipedia.org/wiki/Merchant_services