Do I have Tier Billing?

If you see “Qual” and “Qualified” on your statement, you have Tier Billing.

The only problem with this is. . . 
There’s No Such Thing!

When your customer pays with a basic vanilla, consumer card—be it Visa, MC, Discover—it should come through at the lowest rate (other than debit/checkcard). That is the only time you may pay a fair rate: Qualified.

However, if your customer  pays with any other type of card—and you have absolutely no way of knowing which bank card it is—than you’re screwed!

This is because you are now disqualified into a high rate category for the transaction. If you are 2-Tier, it will be a Non-Qual(ified) transaction, and if you’re on 3-Tier it could be either a Mid-Qual(ified) OR Non-Qual(ified) transaction.

How It Works

What’s happening is your processor is lumping groups of cards which have very different rates into categories in which they suddenly have a single, arbitrary rate.  This is why it is a Lose-Lose situation for Merchants.

If you call Visa or MasterCard, for example, and ask them what their Mid-Qualified, Qualified or Non-Qualified rate is, you’ll probably get a laugh. They will not know what these rates are because they don’t have such a thing.

What You Want

The Ideal situation is a Merchant Account where transactions are assessed based on the True Bank Cost of the transaction.

If your customer pays using a Visa Signature Preferred Card, that is exactly what you should be charged and see on your monthly Merchant Statement.

example:    #   Amount        Card Type                        Rate          PerItem            Fees

                      3    $1,000          Visa SigPref                2.59%        30¢            $26.80

If You Want the Truth

Here’s where you can find the actual rates of every unique card type...

Visa Interchange

http://usa.visa.com/merchants/operations/interchange_rates.html

MasterCard Interchange

http://www.mastercard.com/us/merchant/support/interchange_rates.html

Discover Interchange
Discover does not list card rates, call them at 888-DISCOVER or email me.

American Express

Amex keeps much to itself and does all their own processing. Therefore, they set their own rates according to each of their merchants. To understand and negotiate for better rates and service, contact them directly at 800-528-5200