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.
Discount 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.