Interchange Rates and Fees for Merchants

Find out how a transaction clears at the best rate and what it means when a transaction doesn't qualify.

Transaction qualifications

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

Missing/invalid tran ID from authorization (Visa)

Description: A unique identification code returned from Visa in the authorization request.

Some possible reasons for this non-qualified fee code

  • Transaction was hand-keyed, but account is set up for all transactions to be initiated via magnetic stripe, chip card, contactless device, or customer signature.
  • Address Verification Service (AVS) was not completed for a keyed transaction.
  • AVS did not match for a card not present hand-keyed transaction.
  • Electronic authorization data was not submitted, i.e. voice authorization was received and/or transaction was force entered.
  • The terminal application or software being used for processing is outdated and needs to be upgraded.

Remedy

  • Initiate all card transactions using magnetic stripe, chip card, contactless device, or customer signature.
  • Complete AVS when prompted.
  • Attempt to obtain correct address information from cardholder.
  • Obtain an electronic authorization and avoid forcing transactions where possible.
  • Have outdated terminals and software upgraded.

Missing/invalid Banknet data from authorization (Mastercard)

Description: A reference number assigned by Mastercard to each transaction.

A possible reason for this non-qualified fee code

Electronic authorization data was not submitted, i.e. voice authorization was received and/or transaction was force entered.

Remedy

Obtain an electronic authorization and avoid forcing transactions where possible.

Missing/invalid ACI from authorization (Visa)

Description: Authorization Characteristic Indicator (ACI) is a value determined by Visa based on the data included with the authorization request. It is then returned with the electronic authorization response.

Some possible reasons for this non-qualified fee code

  • Card not present transaction hand-keyed with no AVS.
  • Transaction was hand-keyed, but account is set up for all transactions to be initiated via magnetic stripe, chip card, contactless device, or customer signature.

Remedy

  • Complete AVS when prompted for card not present transactions. (If your terminal or software is not prompting for AVS, please contact Customer Service.)
  • Initiate all card transactions using magnetic stripe, chip card, contactless device, or customer signature.

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.

Remedy

  • 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.

Remedy

Settle transactions daily.

Existing merchant customers: Call us at 1-800-451-5817, 24 hours a day, 7 days a week. Or contact your account manager.