Non-Qualified rates are typically the highest rates a merchant will be charged for credit card processing. Transactions may be categorized as non-qualified for a variety of reasons, the following:
- the card being of a certain type (like business or international cards)
- information being entered incorrectly
- the transaction not being settled within a specific timeframe
These transactions are considered to be riskier by the credit card processing companies, and therefore incur higher fees. For example, a transaction may be considered non-qualified if the credit card is not physically present, as this increases the risk of fraud.
Additionally, transactions involving international cards may be considered non-qualified because they pose additional risks related to currency conversion and cross-border fees.
It is essential for merchants to understand what types of transactions will be categorized as non-qualified and the associated fees, as this can have a significant impact on their overall processing costs.
Some payment processors may have more stringent criteria for what constitutes a non-qualified transaction, so it’s important for merchants to review their merchant agreement carefully and discuss any concerns with their processor.