This fee is often referred to in the credit card processing industry as a “Non-Qualified Transaction Fee,” or “Non-Qualified Downgrade Fee,” or just as “Non-Qual.” The Non-Qualified fee is most often found in three-tier merchant account pricing schemes with the other two tiers referred to as “Qualified” and “Mid-Qualified.” This fee is actually a surcharge that is added on top of the base tier (Qualified Rate) for certain card types, transaction methods, and merchant mistakes. The Non-Qualified surcharge is the most expensive of the tiers and can cost merchants an average or 1.5% -2.5% on top of the Qualified rate. Generally, merchant account providers apply Non-Qualified fees because of the customer used a corporate card, government card, foreign credit card, certain rewards card or was missing certain information (Missing address information, missing tax information, missing customer code or order number). The Non-Qualified is also often used as a “catch all” tier for card types that cannot be identified correctly during the transaction ‘ – processing. Additionally, the Non-Qualified surcharge may be applied to retail merchants that type in a transaction instead of swiping it, and/or to all transactions if a merchant fails to “batch out” within 48 hours of a transaction.

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