Learn the lingo on your credit card processing statement
January 7, 2015
Take a look at the monthly statement from your merchant services provider and it’s easy to get lost in all the jargon. Qual this, mid-qual that, and what the heck is PCI compliance anyway?
Let’s cut through the industry-speak, so you can see exactly where your fees are going:
Qualified: Your qualified rate is determined from your merchant processing bank based on risk. A qualified card is based upon a successful pass of a customer’s CVV code on the back of their credit card and AVS (address / zipcode verification). Typically, debit cards have a qualified rate because there is very little risk involved and the customer’s information will match up with the verification process.
Non-Qualified: Non-qualified rates downgrade 1-2% from the qualified rate. They are the most expensive transactions likely because they possess the highest risk factor or, because a customer receives rewards for using their purchase (i.e. points, airline miles, cash back, etc). Those rewards need to be paid by someone – and that often lies at the feet of the merchant. Therefore, the merchant’s transaction rate is downgraded the 1-2% to non-qualified to cover those costs.
Mid-Qualified: This rate downgrades from the qualified amount between .5-1% per purchase, so you’re paying a bit more for these transactions.
Dues & Assessments:This is a fee from Visa, Mastercard, and Discover charged to the banks for the privilege of accepting their credit cards…and of course, that fee is passed on to the merchant. Each major credit card line has their own “dues and assessments” description, which one of the reasons why it’s difficult to read a credit card statement!
PCI Compliance: Visa and Mastercard both require this fee to ensure that your merchant website, terminal, or virtual terminal is secure for credit card data input. To be PCI compliant, you need to successfully answer a questionnaire about the security of your website. A merchant will be charged this fee monthly to ensure the maintenance of this compliance.
Non-Compliance Fine: If you are not PCI compliant, you will be charged this fine. A merchant has 90 days from the approval of their merchant account contract to become PCI compliant.
Reg. Bundle: This is a fee from Mastercard, by Mastercard, to accept Mastercard. Nice. Mastercard is the only major credit line that charges this fee.
Wondering about fees on your credit card processing statement that we didn’t cover? Call Total-Apps at (949) 274-8975 and we’ll be happy to review your statement with you, no obligation whatsoever!