Qualified Rate

“Qualified Discount Rate” or “Qualified Transaction Fee,” may refer to fees charged in tiered/bucket merchant account pricing schemes. There is usually a three-tier fee model that merchants use. The Qualified rate also exists right alongside what are referred to as rates called “Mid-Qualified” and “Non-Qualified”. There are no industry standards on how rates and fees can be structured or what they must be called, so you may find many name variations.

Oftentimes, merchants are only quoted the Qualified rate in advertisements or over the phone because it is the lowest and most attractive fee. Examples of Qualified rate quotes might resemble something like “1.59% + $0.10 per transaction,” but make no mention that 50%, or less, of a merchants transactions will experience this low rate. The remaining percantage of transactions will result in being charged the higher Mid- and Non-Qualified tiers.

Typically, the providers for merchant accounts decide the rate tier for every particular merchant based on what type of card is issued. Cards that come with reward programs, and signature debit transactions that do no incur rewards generally fall into the Qualified rate tier program.

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