The most important group is merchants like you that accept payment cards. You are granted the ability, for a fee, to accept card payments from your customers. You likely procured services from a re-seller and are paying in one of two ways:
- Tiered Pricing - If you see transactions grouped on your statement in categories like "qualifying", "mid-qualifying" and "non-qualifying," you are on tiered pricing. In this case, some player up the value chain from you has grouped interchange categories into three pricing tiers. "Qualifying" transactions are often limited to those done in person when a card is swiped.
- Pass-Through Pricing - If you see a wide variety of transaction types plus common per transaction charges you are likely on an interchange pass-through schedule. Often you will see a certain percentage and/or amount of cents added to each transaction under this structure.
You can have a good or a bad deal under either structure depending on your volume, specific rates, monthly fees, and other charges. Some unscrupulous re-sellers will present attractive qualifying rates and then surprise you with high mid and non-qualifying rates, excessive monthly fees, transaction charges, equipment rental, gateway fees, customer service charges, and anything else they can come up with to squeeze out more profits.
You must understand what you are being charged and why, pay attention to your monthly statements, shop around, and understand how different transactions cost more or less.
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