When you get a credit card processing account so that customers can use credit cards at your establishment, you might notice that the processor offers different rates for qualified and non-qualified credit cards. It’s easy to see that non-qualified credit cards cost more in transaction rates, but what differentiates the two?
Qualified Credit Cards
Merchant accounts allow you to accept a variety of credit cards, but the majority of your customers will be using qualified credit cards if you own a physical business. A qualified card is whenever the customer’s credit card is in accordance with the processor’s rules. For example, if you get all of the required information and the customer signs for the purchase, then it’s a qualified purchase.
This must also come from a regular consumer card at a physical business. Unless your credit card processing account is different, you’ll find that all payments over the Internet or phone are considered non-qualified and force you to pay a higher rate for the transaction.
Non-Qualified Credit Cards
Even though merchant accounts allow you to accept these cards, they technically go against one or more of the processor’s rules or require extra fees to protect against fraud or pay for special benefits.
Special credit cards are almost always non-qualified. For example, business cards and rewards cards are non-qualified. If the payment breaks one of the processor’s rules, such as not getting a signature or improperly handling data, then the purchase will be considered non-qualified.
Any purchase that doesn’t meet applicable security requirements will also count as non-qualified. This is why Internet and phone transactions are commonly considered non-qualified because the customer doesn’t have to sign for the purchase.
While it might be difficult to get the best rates if you do business online or over the phone, you can keep the rates low by following the processor’s rules. If you ensure that each purchase is as secure as possible, then your rate will be lower.
Both qualified and non-qualified purchases are made with good credit cards, but you’ll sometimes have to pay more for small differences. If you get signatures and as much information as possible, stay within the rules and physically swipe the card, then most of the purchases will be qualified. Just work within the processor’s rules to get the best processing rate.