Also referred to as Bucket Pricing, this pricing scheme groups the hundreds of different interchange programs into a handful of buckets with different rates, commonly called Qualified, Mid-Qualified and Non-Qualified tiers. Processors group cards in tiers and set tier rates at their discretion in an attempt to simplify the pricing methodology and merchant statements. A merchant’s overall credit card processing cost is based on Tiered Pricing is the sum of the product of the number of transactions that fall into each of the buckets multiplied by the effective processing rate for that bucket.

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