02 Nov What Is A Non Qualified Rate?
Without a doubt, if a person runs a company and needs to accept credit cards, they must do so wisely; they must also know how everything works. Otherwise, with one mistake, a company can lose plenty of cash. With this in mind, it’s important to understand what constitutes as a non-qualified rate. Here are three instances this would occur.
Keyed into a terminal: First and foremost, when going to a store, some people will run their credit card processing job through a machine. When this occurs, merchant accounts often charge a higher rate since the corporation can’t verify the user’s address. Since there is a high rate of fraud on these transactions, the business will need to charge the non-qualified rate. Remember, not only that, a person can make one minor mistake when entering the data, which will leave the merchant services provider in a bind as they can’t always know which person to charge or how to proceed. Luckily, this is less common now as there as not a lot of independent credit card companies that confuse the buyer or seller.
Special kind of credit card: Think about it, when using merchant accounts, some people will use an unknown or special type of credit card. When one is entered with fewer digits or other parts, the credit card processing company may charge a non-qualified rate to the company. Remember, most credit cards are roughly the same, but when they aren’t’ the buyer must take the time to enter the transaction.
Does not settle in time: Finally, when trying to cash out and settle the transactions, most companies will do so within a day or two. In fact, the rule is usually 48 hours as the company will have to submit everything and upload the report in a large batch. When avoiding this, one will have to pay a non-qualified rate as the merchant account provider will often not take kindly to this. Then, when doing so, one will have to pay a slightly higher fee for the transaction.
When using a credit card terminal or a special card, one will often have to pay a higher rate. At the same time, if the transaction does not settle in time, one will have to pay more. For this reason, a smart entrepreneur should take the time to understand how it all works and how to pay the lowest fees all the time.