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How is the processing rate determined for a MC/Visa credit card transaction.
Credit card transactions are categorized by card type. There are many different card types, such as basic MC/Visa cards, rewards cards, corporate cards, purchasing cards, etc. Each card type has a specific cost associated with it. This the percentage rate charged by the MC or Visa association to process the transaction. It's called the "interchange rate". All banks pay the same interchange rate to actually process a particular card type.
SAGE, through Merchant Focus, offers two price models for payment processing services. For new merchants or those processing less than $250,000 per year in MC/Visa, we offer fixed pricing -- similar to what you are used to seeing elsewhere. The fixed pricing includes two rates -- the "qualified rate" and the "non-qualified" rate. Each cart type mentioned above is classified into one of these two groups. Basic MC/Visa cards and most rewards cards will be processed at the "qualified rate". Other card types (including corporate cards and purchasing cards) will get the "non-qualified rate".
Since many transactions in our industry (since it's a business-to-business industry) will be non-qualified, it's important to compare both the qualified and non-qualified rates when you are comparing payment processing services.
If you are processing more than $250,000 per year in MC/Visa transactions, Merchant Focus will provide you with a custom quote based on "interchange-plus" pricing. This pricing model takes the interchange rate (or actual cost charged by MC or Visa) for the particular card type and adds a fixed percentage as a markup. This pricing model was historically reserved for the very largest companies. It typically provides the lowest rates because you are paying a fixed markup above the actual transaction cost.
For more information on specific pricing information, please contact Merchant Focus. For the Full Interchange Categories as published by Visa and MasterCard see:
| Type: | Info | Publish Date: | 8/12/2009 11:26:52 AM |
| Applies To: | Payment Processing | Last Updated: | 8/14/2009 5:18:41 PM |
| Platform: | All | Expiration Date: |