Find out how a transaction clears at the best rate and what it means when a transaction doesn't qualify.
How a transaction qualifies
When you process a payment transaction, the transaction typically clears within your anticipated interchange program (also known as interchange level). This is usually the interchange program at which you were priced or at the interchange program where the majority of your transactions typically clear and helps you achieve the best possible processing rates.
The payment networks (Visa®, Mastercard®, Discover®, and American Express®) establish the specific transaction criteria for each interchange program. As a Wells Fargo Merchant Services customer, you can find the specific processing guidelines and qualification criteria for your anticipated interchange program on the online Payment Network Qualification Matrix which is provided to you when you sign up for a merchant account.
When a transaction doesn't qualify
When a transaction clears within a different interchange program other than the one at which you are priced, or does not meet the specific qualification criteria established by the payment networks, you may be charged the difference between the clearing interchange rate and the priced interchange rate. This difference is called a “non-qualified interchange fee” and the transaction is sometimes referred to as a downgrade.
Some common reasons why transactions clear within a different interchange program are:
- Foreign card processing
- Incomplete information for commercial card
- Processing changes (such as a delay in settlement)
- Missing information
- Not using AVS (Address Verification Service)
Common non-qualified fee codes
Transaction cleared as corporate/business card (Mastercard/Visa)
Description: Designated for business-to-business transactions. This includes business cards, commercial cards, and purchase cards.
Some possible reasons for this non-qualified fee code
- A commercial card was accepted at a travel and entertainment merchant (hotel, car rental, restaurant).
- Retail merchant failed to enter data at commercial card prompts.
- This is a non-remedied non-qualified fee. Commercial card transactions clear at a higher percentage rate and will process with a higher fee.
- Always enter tax and customer code data when prompted. (If terminal or software does not prompt for tax and customer code, please contact Customer Service.)
Exceeded timelines (Mastercard/Visa)
Description: Exceeded the time allotted by Visa and Mastercard to process a transaction
A possible reason for this non-qualified fee code
Failed to batch terminal daily.
Settle transactions daily.