Tiered Card Processing Rate.
Utah EZ Pay often get business owners asking what the difference is between our Edge 0% rate and our Tiered 1.29% processing rate. The Edge 0% rate is what we call a dual pricing model. With dual pricing, one price is set up for cash and check (if you accept cash/checks) transactions and a separate price for card transactions with one set rate for all cards. With the tiered rate system, the rate is setup to apply the price based on the type of credit or debit card being used.
Understanding The Tiered .39% – 1.29% Processing Rate.
The tiered processing rate is just what it sounds like. The tiers are the various levels of pricing set up for specific cards being accepted. Several rates can fall into this tiered bracket structure. Tiered pricing is a merchant account rate structure that merchant service providers use to assess charges based on the card that was used for the transaction such as debit and credit, reward cards.
As the business owner, you would pay the rate that type of card into in the tiered pricing structure. For the sake of merchant services, (credit card processing) we have outlined a few levels here for your reference:
- Debit PIN: swiped debit cards with a PIN 1.29%
- Qualified: swiped credit / debit non-reward cards transactions 1.29%.
- Mid-qualified: rewards / membership, loyalty cards and manually keyed-in transactions 2.69%
- Non-qualified: corporate card, high-reward credit card, international card and card-not-present transactions 2.99%
- eCommerce: online only transactions on a website 3.49%
Looking For Padding In Tiered Rates.
What is padding for tiered credit card processing rates? When you are looking at your merchant service statement, it will show the pure cost rate (interchange rate) listed for each tiered rate. Then it will show the fee the processor is charging for their service.
Often the processor will inflate (add padding) to the interchange rate rather than listing the true cost of the rate that is specified by the card issuer. The provider is increasing the rate and making it appear as the pure cost of the rate.
i.e. 1.89% interchange rate charged when the actual interchange rate should be 1.69%, so this rate was padded by .20% which is 20 basis points.
The Tiered Rate That We Set Is The Rate You Will Pay.
When Utah EZ Pay sets the tiered rate on your account, it will not change. For example, if we set your processing account rate at 1.29% for taking credit, debit, (with and without PIN) rewards card present transactions (qualified), it will stay that way. This is a legal agreement between you as the business and owner and the merchant service provider. With our screened processors, you will not find padding on your statement. They are simple to read with all of the rates listed and no hidden fees. Submit your statement today at free analysis.com or call/text us at 801.205.1955.
Informative Video on Viewing Statements & Other Features in Payments Hub.
Your Business Has Options For Tiered Or Edge Processing Rates To Consider.
Here at Utah EZ Pay we want you to have the choice between our Tiered 1.29% rate, our Edge 0% rate or Interchange Plus rates. We want you to be in the know so you can make the best informed decision for your business.