Tiered Pricing
A pricing model that groups transactions into qualified, mid-qualified, and non-qualified buckets, making your true cost impossible to verify.
Tiered pricing bundles interchange, assessments, and processor markup into a single rate per bucket. Your processor decides which transactions fall into which tier, and the criteria are written into your agreement in ways most merchants never read.
A typical structure has three tiers: qualified (lowest rate, usually swiped consumer debit/credit), mid-qualified (higher rate, often keyed-entry or rewards cards), and non-qualified (highest rate, business cards, foreign cards, anything that "downgrades"). Some processors use four or five tiers.
The problem: there is no independent way to verify whether a transaction was correctly bucketed. The processor controls both the classification rules and the billing. Rewards cards, which now represent the majority of consumer spending, almost always land in mid-qual or non-qual, meaning the rate you were sold rarely applies to most of your actual transactions.
Tiered pricing is the most common pricing model in the US market. It is also the most profitable structure for processors, which is why it is so widely sold.
If your statement shows a "qualified rate" alongside "mid-qual" and "non-qual" surcharges, you're on tiered pricing. Upload your statement to see what IC+ would cost you.
See how your effective rate compares to what competitive IC+ pricing would cost you.
Open CalculatorMore terms to know.
You now know more than most merchants.
Find out if your processor knows you know.
Upload your statement. We'll show you every fee by name, what each one costs you annually, and what you'd pay with a competitive processor. Same day or less, free.
Get My Free Statement Audit