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Rate Qualification Guide Midwest Transaction Group is committed to providing you the most cost-effective credit card processing service in the industry. That’s why we’ve developed this rate qualification guide. If you process credit card transactions in a retail, restaurant or mail order/telephone order environment, this guide will help you process them in the least expensive way possible. Retail: In a retail environment, the credit card is typically present and therefore processed by swiping it through a terminal. While the credit card information can be key-entered into the terminal when the transaction is conducted over the phone or through the mail, the vast majority of transactions in a retail environment are swiped. This is the least expensive environment to process a credit card because the signature of the person authorized to use the card can be verified. There are three rate qualification categories in a retail processing environment – qualified, mid-qualified and non-qualified. Qualified is the lowest retail processing rate category. In order for a transaction to qualify for this category, the credit card must be swiped through the terminal, the contents of the magnetic stripe transmitted and an authorization number received. The transaction must also be settled or batched out of the terminal within 24 hours of the authorization. Mid-qualified is the lowest rate category in the retail processing environment for which key-entered transactions can qualify. This category requires that the billing address of the cardholder be verified with a match of their zip code. Once again, an authorization number must be received and the transaction settled or batched out of the terminal within 24 hours of that authorization. Non-qualified is the highest rate category in the retail processing environment. Generally speaking, this rate applies to key-entered transactions where the address is not verified with a zip code match or transactions that are not settled or batched out of the terminal within 24 hours of their authorization. Special Exceptions Rewards Cards – The best category for which rewards cards can qualify is the mid-qualified category, even if they are swiped through the terminal. With 20% or so of the cards in circulation being rewards, the typical retail merchant will have some mid-qualified transactions. Business Cards – While some business cards qualify at the mid-qualified rate category, the majority including MasterCard’s World card or Visa’s Signature card qualify at the non-qualified rate. Foreign Cards – Foreign card transactions always qualify at the non-qualified rate category regardless if they are swiped or key-entered. Voice Approved Cards – Anytime a transaction is authorized by a call center and later hand keyed into the terminal, it will go to the non-qualified rate category. Restaurant: While a restaurant environment may appear to be a similar processing environment to retail, it is actually much different. That’s because restaurant transactions are often adjusted after they are authorized so a tip can be added. The same is true with salons and spas. Like retail, however, most credit cards are swiped through the terminal and the signature of the person authorized to use the card can be verified. There are three rate qualification categories in a restaurant processing environment – qualified, mid-qualified and non-qualified. Qualified is the lowest restaurant processing rate category. In order for a transaction to qualify for this category, the credit card must be swiped through the terminal, the contents of the magnetic stripe transmitted and an authorization number received. The transaction must also be settled or batched out of the terminal within 24 hours of the authorization. In addition, Visa requires that the original authorization amount must be within 20% of the adjusted amount that includes the tip. Mid-qualified is the lowest rate category in the restaurant processing environment for which key-entered transactions can qualify. This category requires that the billing address of the cardholder be verified with a match of their zip code. Once again, an authorization number must be received and the transaction settled or batched out of the terminal within 24 hours of that authorization. Non-qualified is the highest rate category in the restaurant processing environment. Generally speaking, this rate applies to key-entered transactions where the address is not verified with a zip code match or transactions that are not settled or batched out of the terminal within 24 hours of their authorization. Special Exceptions Rewards Cards – The best category for which rewards cards can qualify is the mid-qualified category, even if they are swiped through the terminal. With 20% or so of the cards in circulation being rewards, the typical restaurant will have some mid-qualified transactions. Business Cards – While some business cards qualify at the mid-qualified rate category, the majority including MasterCard’s World card or Visa’s Signature card qualify at the non-qualified rate. Foreign Cards – Foreign card transactions always qualify at the non-qualified rate category regardless if they are swiped or key-entered. Voice Approved Cards – Anytime a transaction is authorized by a call center and later hand keyed into the terminal, it will go to the non-qualified rate category. Mail Order/Telephone Order: In a mail order or telephone order environment, the credit card is seldom, if ever, present and therefore processed by hand keying the number into a terminal or some other point of sale device. That number is typically taken over the phone, through the mail or over the Internet. A mail order/telephone order environment is a more expensive environment in which to process transactions because the signature of the person authorized to use the card cannot be verified. There are two rate qualification categories in a mail order/telephone order processing environment – qualified and non-qualified. Qualified is the lowest mail order/telephone order processing rate category. The category requires a zip code verification attempt, an authorization number and a settlement or batch within 24 hours of the authorization. Non-qualified is the highest mail order/telephone order processing rate category. The rate applies to transactions where zip code verification is not attempted or when transactions are not settled or batched out of the terminal within 24 hours of their authorization. Special Exceptions Business Cards – While some business cards qualify at the qualified rate category, the majority including MasterCard’s World card or Visa’s Signature card qualify at the non-qualified rate. Foreign Cards – Foreign card transactions always qualify at the non-qualified rate category. Voice Approved Cards – Anytime a transaction is authorized by a call center and later hand keyed into the terminal, it will go to the non-qualified rate category.
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