How does tiered pricing work?

How does tiered pricing work?

Tiered pricing splits the fees you pay per transaction into three tiers, based on how you process the card and the associated risk of the transaction. The credit card processor assigns the transaction into one of the following tiers:

  • Qualified - lowest risk and lowest cost per transaction
  • Mid-qualified
  • Non-qualified - highest risk and highest cost per transaction

If you run a transaction incorrectly or it has a higher risk associated with it, the transaction is downgraded to a mid-qualified or non-qualified tier. We recommend that you avoid running downgraded transactions as they have a higher processing cost.

Tiered pricing: monthly vs. daily payment

Tiered pricing: monthly

We calculate your card transaction fees once per calendar month based on the tiers used by the processor. We deduct them with your account fees from the money funded to your bank account. We take monthly fees out of your account between the second and fifth business day of the month. 

An example of the summary section of a monthly statement.

Monthly statement: Summary for monthly tiered pricing

An example of the summary of batches section with the total fees for the month highlighted.

Monthly statement: Summary of batches for monthly tiered pricing

Tiered pricing: daily

We deduct card transaction fees daily at the qualified rate from the money funded to your account. At the end of the month, we calculate additional fees owed for card transactions which downgraded to the mid-qualified and non-qualified rates. We deduct the balance owed from your account along with your account fees. We take monthly fees out of your account between the second and fifth business day of the month. 

An example of the summary section for daily tiered pricing.

Monthly statement: Summary for daily tiered pricing

An example of the summary of batches section with the total fees for the month highlighted.

Monthly statement: Summary of batches for daily tiered pricing

Modified on: Thu, 21 Feb, 2019 at 8:58 AM