If you’ve ever looked at your credit card processing statement and seen a charge labeled “Non-Qualified Rate” or “Non-Qual,” you might have asked yourself: What is this, and why am I paying more for some transactions?
At Beacon Payments, we believe in helping business owners understand exactly what they’re being charged—and how to avoid overpaying. In this post, we’ll explain what a non-qualified rate is, why it happens, and how to avoid it to save money on your processing fees.
What Is a Non-Qualified Rate?
A non-qualified rate is the highest possible pricing tier a transaction can fall into on a tiered pricing credit card processing model. It typically carries the highest percentage fee, which means you pay more for those transactions compared to "qualified" or "mid-qualified" ones.
In short:
Non-qualified = most expensive transactions on your statement.
Why Do Transactions Fall into the Non-Qualified Category?
Processors use tiered pricing to group transactions into three categories:
- Qualified: Standard consumer credit/debit cards, swiped or dipped in-person
- Mid-Qualified: Rewards cards, key-entered or phone transactions
- Non-Qualified: Premium or business cards, card-not-present sales, or if the transaction doesn’t meet certain criteria (like batching late)
Transactions can be marked non-qualified for several reasons:
- The card used is a rewards, business, or corporate card
- The card information was manually keyed in instead of swiped
- The transaction was not settled (batched) within 24 hours
- The customer used an online payment gateway without AVS or CVV
- The processor’s pricing plan is designed to upsell you into higher tiers
Why It Matters
Non-qualified transactions can cost up to 1–2% more per sale than qualified ones. Over time, that adds up—especially if you regularly process corporate or keyed-in transactions.
Here’s an example:
| $1,000 Transaction | Qualified Rate (1.59%) | Non-Qualified Rate (3.25%) |
|---|---|---|
| Fee Paid | $15.90 | $32.50 |
How to Avoid Non-Qualified Rates
✅ 1. Switch to Interchange-Plus Pricing
The best way to eliminate confusing tiered rates is to move to an interchange-plus model, where you pay the actual card cost (set by Visa/MC) plus a transparent markup. This structure eliminates mystery pricing and helps you keep more of what you earn.
✅ 2. Use EMV-Compliant Equipment
Make sure you’re dipping or tapping cards with a chip-enabled terminal. Swiping or keying in cards can trigger non-qualified rates.
✅ 3. Batch Out Daily
Always settle your transactions at the end of each business day. Failing to batch within 24 hours can cause transactions to downgrade.
✅ 4. Use Address Verification (AVS) and CVV for Online or Keyed-In Payments
Including billing zip codes and CVV codes adds security and helps you qualify for better rates.
✅ 5. Work with a Transparent Processor
Some providers rely on non-qualified fees as a profit center. At Beacon Payments, we show you exactly what you’re paying and help you avoid unnecessary surcharges.
Final Thoughts
Non-qualified rates are one of the most common (and costly) traps in credit card processing. If you’re being charged them regularly, you’re probably overpaying—and it may be time to reevaluate your provider or pricing model.
At Beacon Payments, we offer transparent, fair pricing and free statement reviews to help you understand your fees and find ways to save.
Want to know if you're paying non-qualified rates?
Contact us today for a no-obligation review of your merchant statement.