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Credit Card Processing Rates Made Simple

Posted On: Friday, June 21st 2013 by

Don’t be confused by the rates and fees associated with a merchant services account. Keith Drayer from Henry Schein Financial Services demystifies the terminology with a quick primer on some of the most common rates and fees. Read the full article on Sidekickmag.com.

ccprocessing 413.jpg Credit Card Processing Rates Made SimpleDiscount Rate: The basic fee that you pay your merchant services provider for processing each credit card transaction and depositing the funds into your bank account.

Transaction Fee: An additional fee sometimes added to each transaction to mitigate risk and cover costs.

Authorization Fee: A fee assessed by the provider of connectivity services between your practice and the card companies.

Rate Tiers: Credit card transactions generally fall into one of three categories or tiers:

  • Qualified: Usually the lowest of all rate tiers; applies to transactions when the card is physically present.
  • Mid-Qualified: An additional percentage assessed when a credit card payment does not meet the standards for the Qualified tier. Occurs if the card information is manually entered into the terminal, instead of swiped.
  • Non-Qualified: An additional percentage assessed when a card payment does not meet the standards for either the Qualified or Mid-Qualified tier. Often occurs if card information is manually entered; if address verification is not performed; or if the transaction is not settled within the allotted time frame.

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