Non-Qualified Rate

The Non-Qualified Rate refers to the highest percentage rate that a merchant is charged for credit card transactions within a tiered pricing structure. This rate applies when certain criteria set by the payment processor are not met by the transaction. Typically, transactions fall into this category due to factors such as the manner in which the credit card is processed (e.g., manually entered versus swiped or inserted), the type of card used (e.g., business or international cards), or failing to adhere to other specific processing requirements such as timely settlement or complete data provision.

This rate is a significant aspect of merchant account agreements and is usually higher than the "qualified" or "mid-qualified" rates due to the increased risk or cost associated with processing these types of transactions. Merchants need to be aware of the conditions that lead to transactions being categorized at the Non-Qualified Rate to manage costs effectively and consider strategies that might help more of their transactions qualify for lower rates.