What is Merchant Account Tiered Pricing?
Tiered pricing in merchant accounts categorizes credit card transactions into different rates defined as qualified, mid-qualified, and non-qualified tiers. This model bases its classification on the perceived risk and type of transaction.
What are the Rates of Tiered Pricing in Merchant Accounts?
Qualified rates apply to standard, low-risk transactions often using debit or non-reward credit cards presented in person. Mid-qualified rates include slightly riskier or reward card transactions. Non-qualified rates encompasses the highest risk transactions, such as corporate credit cards or manually keyed-in numbers. Each tier has its own associated costs, with higher rates charged for transactions falling into the higher risk categories.
What are the Benefits of Tiered Pricing?
Tiered pricing can offer advantages for your business with a high volume of standard, low-risk transactions. This pricing model simplifies the cost structure, making it easier for you to predict monthly expenses related to credit card processing. If your business qualifies for the lowest rate tier, this can result in lower overall processing fees compared to other models that might charge a uniform rate for all transactions. This tiered system is great for your business if you're looking for straightforward billing statements, as it groups transaction types clearly, allowing easier financial oversight and budgeting.
Diane Oberto
Hello Phillip,
I have a small tavern in Nolanville, Texas. I have been open for 2 years now, and have had a contract with Harbortouch POS. My rates are tiered and have had numerous problems with billing, equipment and service. Most recently, my monthly payment for the POS and processing fees is nearly $100 more than the previous month (and I had less sales this month). I have a contract with them, and I would like some guidance to switch to a honest company that would be willing to buy me out of my contract.
I hope you can help,
Diane
Phillip CPO
Hi Diane,
Be very wary of any agent that tells you that his/her company will buy you out of your current contract. It is rarely, if ever, honored in my experience. If you are looking for a highly rated provider, please see this page.