Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header
Share for a Cause









The Difference Between Qualified, Mid-Qualified and Non-Qualified Credit Card Transactions

Written by: Drew Goldbaum

Article Overview: The three general categories under which a credit card transaction is approved at is often a very confusing topic for small business owners. This article aims to provide an explanation as to how and why transactions will be processed at the different qualification levels - Qualified, Mid-Qualified, and Non-Qualified for Retail, MOTO and Internet merchants.

Free Download - How to Choose the Best Merchant Services Provider By Drew Goldbaum
Name: Email:

The Difference Between Qualified, Mid-Qualified and Non-Qualified Credit Card Transactions

(Please note that the requirements explained below are subject to change)

Retail Merchants

In the realm of credit card processing a "Retail Merchant" is defined as a merchant who does over 70% of their transactions swiped through a credit card terminal at the point of sale/transaction.

Qualified Transaction (also referred to as the Swiped Rate)
- In general terms, this is the rate charged per each transaction when the card is physically swiped through a credit card terminal.

Qualified Transaction Conditions

* The credit/debit card is present at the time of the transaction, the card's full magnetic stripe is read by the terminal, and a signature is obtained from the cardholder at the time of the transaction.

*One electronic authorization request is made per transaction and the transaction/purchase date is equal to the authorization date. The authorization response data must also be included in the transaction settlement.

*The authorization transaction amount must match the settled (deposit) transaction amount.

*The card that is used is not a commercial (business) credit card

*The transaction must be authorized and settled under a standard retail industry code.

*The transaction must be electronically deposited (batch transmitted) no later than 1 day from transaction/purchase/authorization date.

Mid-Qualified Transaction
- In general terms this is the rate charged when a transaction is manually keyed-in using AVS - Address Verification Service (card #, expiration date, address, zip code and CVV code all match)

Mid-Qualified Transaction Conditions

*One or more of the Qualified conditions were not met

Non-Qualified Transaction
- In general terms this is the rate charged when manually keying-in a transaction without using AVS.

Non-Qualified Transaction Conditions
*One or more of the Qualified conditions were not met, or:

*The transaction was electronically deposited (batch transmitted) greater than 1 day from the authorization date, or:

*The card that was used was a commercial card without submitting the additional data (see Commercial Card section below), or:

*The transaction was not electronically authorized, or the authorization response data was not included in the transaction settlement.

Mail Order/Telephone Order (MOTO) Merchants and Internet (Card not Present) Merchant Accounts

In the realm of credit card processing a "Moto Merchant" is defined as a merchant who manually keys in over 50% of their transactions and an Internet Merchant is one who accepts transactions over the Internet via an E-Commerce store with an online gateway or who submits transactions manually through a Virtual Terminal.

Qualified Transaction Conditions (For MOTO/Internet merchants the Mid-Qualified Rate is essentially the Qualified rate as these merchants never swipe a credit card through a terminal)

*One electronic authorization request is made per transaction and the transaction date is equal to the shipping date. The authorization response data must also be included in the settled transaction.

*The authorization request message must include Address Verification Service (AVS), which verifies the street address and the zip code of the card holder. NOTE: The only way this happens is if your software is set up to do this, or, if you are using a terminal, then if you capture the AVS information at the time of keying in your transaction.

*The transaction/shipping date must be within 7 calendar days of authorization date.

*The settled transaction amount must equal the authorized amount.

*The settled transaction must include the business's customer service telephone number, order number, and total authorized amount.

*Additional data (sales tax and customer code) is required in the settled transaction on all commercial (business) cards at non-Travel & Entertainment (T&E) locations.

*The transaction is electronically deposited (batch transmitted) on or 1 day after authorization date.

Non-Qualified Transaction Conditions

*One or more of the Qualified or Partially Qualified conditions were not met, or:

*The transaction was electronically deposited (batch transmitted) greater than 1 day from transaction/shipping/authorization date, or:

*Commercial Card without the additional data (see Commercial Card section below), or:

*The VISA Infinite card was accepted, or:

*The transaction was not electronically authorized or the authorization response data was not included in the settled transaction.

Commercial Card Additional Data

Visa

*Purchasing cards: Sales Tax and Customer Code (supplied by cardholder at point of sale)

*Corporate and Business cards: Sales Tax

MasterCard

*Corporate Data Rate II (Purchasing cards): Sales Tax and customer Code (supplied by cardholder at point of sale)

*Corporate Data Rate II (Business and Corporate cards): Sales Tax

*International Corporate Purchasing Data Rate II: Sales Tax and Customer Code (supplied by cardholder at point of sale)

*The following information must also be provided: Merchant's Federal Tax ID; Merchant Incorporation Status; and Owner's full name if the merchant is a sole proprietor.

Related Articles
  Credit Card Processing Accounts
  Business Credit Cards versus Personal Credit Cards
  Credit Card Advance Financing
  Merchant Cash Advance
  Small Business Cash Advance - How Does it Work?

Home > Retail > Drew Goldbaum > The Difference Between Qualified MidQualified and NonQualified Credit Card Transactions
Article Tags: account, card, credit, ecommerce, merchant, midqualified, nonqualified, online, payments, processing, qualified, services

About the Author: Drew Goldbaum
RSS for Drew's articles - Visit Drew's website

My name is Drew Goldbaum and I am the Director of Operations for Bank Associates Merchant Services. BAMS is an ever-growing merchant services provider with extensive experience in the credit card processing industry. Our corporate headquarters is based in the business center of the world – New York City – allowing us to stay one step ahead of our competitors by offering the most up-to-the-minute electronic payment solutions. We can seamlessly provide you with: Retail Credit Card Processing, eCommerce Processing with Internet Gateways & Virtual Terminals supporting all major credit and debit cards.  Bank Associates Merchant Services provides eCommerce processing and online merchant accounts. Enable your business to accept payments through a variety of payment gateways and online payment services. If you are looking for quality, reliability and technological support, BAMS is the right credit card processing services provider for your business.


Click here to visit Drew's website
Dashed Line

More from Drew Goldbaum
Custom Gift Card Programs for Businesses
How Credit Card Processing Works
Interchange 101
The Difference Between Qualified MidQualified and NonQualified Credit Card Transactions
Credit Card Processing Accounts


Related Forum Posts
credit cards credit cards - Nana, you can get a credit card! Get a Secured Credit Card. It's a Visa or MasterCard which is a hybrid of a chequing/credit card. There are two types: 1. You put in an amount that you would like to have as your credit limit in $500 increments as security and you you can either pay in full each month or make minimum payments 2. You can have a credit card linked to your chequing account and you can spend only has much as you have in your chequing account. I recommend #1 and they both go to improving your credit limit.
Building credit Building credit - Credit is like reputations, I suppose. Takes a lifetime to build, and only a second to destroy.
Marketing and PR ideas related to a Credit Organization Marketing and PR ideas related to a Credit Organization - Hello Everybody! I would be very grateful if you suggested some PR and Marketing ideas for a Credit Organization which target market is poor public who live in village and haven't any access to the internet. Thanx in advance
Offer Credit instead Offer Credit instead - I'm not sure if ChrisH was referring to this but i'll state it more expicitly .. Charge upfront and offer a refund of double the value back in "Credit" towards your Product or Service you have for sale at the end of the event.
Research & Dev Tax Credit - at No Cost (Canada) Research & Dev Tax Credit - at No Cost (Canada) - Brian, I have a colleague that can provide you guidance and even assist in maximizing a R&D Tax Credit from the Government of Canada (If you are Canadian). All this at No Cost to You. I know her well and have referred other people to her. She's got plenty of experience in the field. If you're interested (anyone else on this forum too) just send me a PM and I will share her details with you.


Recommended Article for You close

  Credit Card Processing Accounts

Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.



Featured Article


Bottom Footer
Share for a Cause












Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

ROSI Return on SUNK Investment

What is Discretionary Cash Flow

Ways to Improve Your Landing Page Conversions

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.