Glossary of Industry Terms

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PCI Related Terms Technical Terms

Qualification

The interchange category assigned to a transaction based upon the data supplied for the transaction and the merchant category code (MCC) assigned to the merchant. Processing rates are associated with the interchange category and may be passed through to the merchant (Interchange Pass-through processing) or the qualification level may be used to identify the discount rate to assign to the transaction (see Qualified Discount Rate).

Qualified Discount

See Qualified Discount Rate.

Qualified Discount Rate

This is almost always the smallest rate a merchant may pay when taking credit cards for sales purchases. A Qualified Discount Rate is the percentage that a business is charged for processing a traction at the lowest rate possible for the merchant. Discount rate pricing can be tiered in a number of different fashions. A typical discounted pricing scheme is a three tier model where the models are Qualified, Mid-qualified, and Non-qualified discount rates. In these cases, interchange qualification rates are broken down into one of these categories with the Qualified being the best rates possible for the merchant category; mid-qualified is the next best rates (with the merchant supplying additional information, such as industry specific information or zip code); and the Non-qualified being the worst rates for the merchant, usually downgrading the transactions to standard or EIRF, possibly due to timeliness issues, for example.

The following is a breakdown of these tiers and examples of corresponding situations. A Qualified Discount Rate is the rate a merchant is charged when all conditions are optimum – that is, when a retail transaction is card-swiped and the merchant batches-out electronically at the end of the day. (Keyed/Internet merchants can still archive Qualified rates by obtaining an AVS response plus order number, plus batching out.)

A Mid-Qualified Discount Rate is charged when a retail merchant keys a transaction or does not batch-out at the end of the day.

A Non-Qualified Discount Rate is charged when a merchant keys a transaction and when the transactions are not batched-out at the end of the day. They can also be set to a non-qualified rate due to a timeliness reason (too many days pass between the authorization and the settlement of the transaction).

Qualified Rate

See Qualified Discount Rate.

Questionable Merchant

A merchant or merchant location at which an excessive number of confirmed fraud transactions have occurred within a specified period.

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Not only did PE Systems find that we were being overcharged, they pointed out very simple changes that we could do, that would keep us at the lower rates.
Clatsop Community College

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Clatsop Community College
1653 Jerome Avenue
Astoria, OR 97103-3698

To Whom It May Concern:

For years we suspected that we were being overcharged by our credit card processor. However, no one here had the time or knowledge to get at the details behind our monthly processor charges. PE Systems Inc. stepped in and found the information for us. They then negotiated with our processor to get us the lowest rates possible. Additionally, they got the credit card processor to refund some of the overcharges. Not only did PE Systems find that we were being overcharged, they pointed out very simple changes that we could do, that would keep us at the lower rates.

I strongly recommend the services of PE Systems Inc. if you wish to be assured that you are receiving the best credit card processing rates possible for your business.

Sincerely,
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