The majority of credit cards nowadays provide some kind of reward for using them. Whether this reward is airline miles, points to be redeemed for prizes, or even straight cash, more and more people are using these cards to get the most out of their money.
For merchants, though, reward cards can be a double-edged sword. On one hand, getting an extra reward causes many cardholders to spend more money than they might normally. This, in turn, allows merchants to sell a larger amount faster! On the other hand, though, these credit cards can never achieve the Qualified discount rate.
The Qualified discount rate is the lowest possible cost for you to accept a credit card. In a standard three-tier pricing model, the levels (from least to most costly) are: Qualified, Mid-Qualified, and Non-Qualified. Various details about the transaction come into play when determining which level each ends up being, such as whether the Address Verification Service (AVS) is able to successfully verify the cardholder’s information, as well as the type of card being run.
No matter what you do, though, reward cards can never be ran at a Qualified discount rate. This is because the payment card industry (MasterCard, VISA, etc.) has defined them as being a Mid-Qualifying type of card. However, this does mean that you can still avoid paying the higher Non-Qualified discount rate, if you take the correct steps. For example, providing the AVS with enough correct information.
The catch here is that many merchant service providers do not even offer a different, slightly lower rate for the mid-tier. Most commonly, the Mid-Qualifying rate will be the exact same percentage as the Non-Qualifying one. Many sales agents at other processing companies will not even inform merchants about the Mid-Qualifying discount rate, or how reward cards will be defined. This leads many merchants to believe that reward cards will receive the Qualified discount rate, which is an inaccurate representation of their actual costs.
In order to help our merchants get the best pricing and value possible, eCom Merchant Solutions is offering a great promotion for the month of June. Sign up for our merchant services sometime this month, and we guarantee your pricing will include a Mid-Qualifying discount rate of 2.69%! This promotion is only available for new merchant accounts, and we must receive your application by June 30th, 2015. In order to receive this pricing, make sure to mention this promotion when you submit your preliminary application.
Are you ready to find out how much money we could save you? Fill out our online application here.