Credit Card Processing Glossary

General

Mastercard Commercial - Products T&E; Rate II

  • For Mastercard Commercial Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level II data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Credit - CPS/E-Commerce Preferred - Hotel

Visa Consumer Debit - CPS/E-Commerce - Preferred

  • This category is for visa debit cards
  • The "Preferred" interchange categories are for transactions that used Visa's 3-D secure authentication scheme. In order to encourage use of that scheme, Visa created this category which offers 0.05% reduced rate and removes the liability for fraudulent transactions from the merchant
  • For internet merchants this is the best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number
  • The software utilized by the merchant must send an E-commerce indicator

Mastercard Consumer World - Merit III - Tier 2

Mastercard World Cards are a special variety of rewards card (article in the NYTimes) designed to compete with American Express (press release).

  • This category is for consumer (non-rewards, non business) credit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For businesses with more than $1.25 billion in credit card receipts per year

Visa Consumer Credit - CPS/Retail - Tier 1

  • This category is for visa consumer credit (non-rewards, non-business) cards
  • Best possible rate for an in-person transaction with this card type
  • Only businesses with more than $2.0B in annual volume can qualify for this rate
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • Authorization and transaction date must be within one day of each other

Interchange Rates

For each credit or debit card payment, the majority of the money that the credit card processor collects must be passed along to the bank that issued the card.

Visa and Mastercard define how big those payments are for each type of transaction and the resulting set of rules and formulas is called Interchange. More information on the details of interchange can be found in this blog post: Interchange

Mastercard World Business - Data Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Mastercard Corporate - Products T&E; Rate II

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level II data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Credit - CPS/E-Commerce Preferred - Passenger Transport

Visa Consumer Credit - CPS/E-Commerce - Preferred

  • This category is for visa standard (non-rewards, non-business) credit cards
  • The "Preferred" interchange categories are for transactions that used Visa's 3-D secure authentication scheme. In order to encourage use of that scheme, Visa created this category which offers 0.05% reduced rate and removes the liability for fraudulent transactions from the merchant
  • For internet merchants this is the best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number
  • The software utilized by the merchant must send an E-commerce indicator

Mastercard Consumer World - Merit III - Tier 1

Mastercard World Cards are a special variety of rewards card (article in the NYTimes) designed to compete with American Express (press release).

  • This category is for consumer (non-rewards, non business) credit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For businesses with more than $2.0 billion in credit card receipts per year

Mastercard Consumer World Elite - Merit III

Mastercard World Elite Cards are a subclass of Mastercard Rewards cards with interchange rates higher than Mastercard World cards and Mastercard Rewards cards. There are not very many World Elite cards in circulation (mastercard's World Elite website).

  • This category is for consumer world elite cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Interchange Plus Pricing

Interchange Plus Pricing is the most advantageous to merchants because it provides the least opportunity for the processor to sneak in extra fees.
Processors' largest expense are the fees that they need to pass on to Visa and Mastercard. Those fees are called Interchange.
In Interchange Plus pricing the processor passes along Interchange and adds a fixed markup.
More information: Why you want interchange plus pricing

Mastercard World Elite Business - Products T&E; Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Mastercard World Elite Business - Corporate Data Rate II

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level II data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Credit - CPS/E-Commerce - Preferred (3D Secure Attempt)

Visa Consumer Debit - CPS/E-commerce - Basic

  • This category is for visa regular debit cards
  • For internet merchants this is the best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number
  • The software utilized by the merchant must send an E-commerce indicator

Mastercard Consumer Debit - Merit III - Tier 2

  • This category is for debit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For businesses with more than $1.25 billion in revenue per year

Mastercard Consumer World Elite - Merit III - Tier 2

Mastercard World Elite Cards are a subclass of Mastercard Rewards cards with interchange rates higher than Mastercard World cards and Mastercard Rewards cards. There are not very many World Elite cards in circulation (mastercard's World Elite website).

  • This category is for consumer world elite cards
  • Best possible rate for an in-person transaction with this card type
  • Only businesses accepting more than $1.25B in mastercard sales each year can qualify for this rate
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Payment Gateway / Virtual Terminal

If you intend to accept payment over the phone or internet, you will need a payment gateway (also known as a virtual terminal). The payment gateway can either be accessed through a web browser or can connect to your e-commerce software package (or point-of-sale system).

Mastercard World Business - Products T&E; Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Credit - CPS/Utility

  • For Visa consumer debit cards
  • Visa offers a lower rate to encourage utilities to accept credit cards, since they historically have collected fees via check
  • Only applies to Utilities (MCC = 4900)
  • Transactions that would otherwise qualify for the following categories CPS Retail, CPS Retail Key Entry, CPS Card Not Present, CPS Electronic Commerce Basic, CPS Electronic Commerce Preferred – Retail can achieve this rate

Visa Consumer Credit - CPS/Automated Fuel Dispenser

This category is designed to offer a lower rate for gas stations to encourage them to accept credit cards.

  • Only applicable to gas stations (MCC = 5542)
  • Card must be swiped
  • Authorization must be for $1. Settlement can be up to $75.00
  • This rate only applies to consumer (non-rewards, non-business) credit cards

Visa Consumer Credit - CPS/E-commerce - Basic

  • This category is for visa regular (non-rewards, non-business) cards
  • For internet merchants this is the best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number
  • The software utilized by the merchant must send an E-commerce indicator

Mastercard Consumer Debit - Merit III - Tier 1

  • This category is for debit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For businesses with more than $2.0 billion in revenue per year

Mastercard Consumer Rewards - Merit III - Tier 3

  • This category is for consumer rewards cards
  • Best possible rate for an in-person transaction with this card type
  • Only businesses accepting more than $750M in mastercard sales each year can qualify for this rate
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Credit Card Terminal

To accept credit cards in a retail setting, a business needs a credit card terminal, through which the customers' card is swiped. If you already accept credit cards and own your terminal the best solution is to have your new credit card processor reprogram your existing terminal (easy to do over the phone). If you are new to accepting credit cards or already accept credit cards and lease your terminal, you will need a new terminal.

Mastercard Elite Corporate - Data Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Debit - CPS/Utility

  • For Visa consumer debit cards
  • Visa offers a lower rate to encourage utilities to accept credit cards, since they historically have collected fees via check
  • Only applies to Utilities (MCC = 4900)
  • Transactions that would otherwise qualify for the following categories CPS Retail, CPS Retail Key Entry, CPS Card Not Present, CPS Electronic Commerce Basic, CPS Electronic Commerce Preferred – Retail can achieve this rate

Visa Consumer Debit - CPS/Automated Fuel Dispenser

This category is designed to offer a lower rate for gas stations to encourage them to accept credit cards.

  • Only applicable to gas stations (MCC = 5542)
  • Card must be swiped
  • Authorization must be for $1. Settlement can be up to $75.00
  • This rate only applies to debit cards

Visa Consumer Debit - CPS/Retail - Debit

  • This category is for visa debit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • Authorization and transaction date must be within one day of each other

Mastercard Elite Corporate - Standard

  • For mastercard elite corporate cards
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Mastercard Consumer Debit - Merit III - Tier 3

  • This category is for consumer debit cards
  • Best possible rate for an in-person transaction with this card type
  • Only businesses accepting more than $750M in mastercard sales each year can qualify for this rate
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Mastercard Corporate - Data Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Amex - Transaction Fee

American express transactions can usually be originated over the same network as your visa and mastercard transactions. The processor usually won't add a percentage markup to the transaction, but will add a transaction fee, which is often larger than the comparable transaction fee for a Mastercard or Visa transaction.

Visa Signature Preferred - Standard

  • For visa signature rewards card
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Visa Consumer Credit - CPS/Retail (Credit)

  • This category is for visa credit (non-rewards, non-business) cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • Authorization and transaction date must be within one day of each other

Mastercard World Elite Business - Standard

  • For mastercard world elite business cards
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Mastercard Consumer World - Merit III

Mastercard World Cards are a special variety of rewards card (article in the NYTimes) designed to compete with American Express (press release).

  • This category is for consumer (non-rewards, non business) credit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Doing Business As (DBA)

This is your company's common name - the name used in marketing and with customers. For example, your official name might be "BCITW LLC" while your DBA (doing business as) is "Best Cookies In the World".

Mastercard Elite Corporate - Products T&E; Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Mastercard Consumer World Elite - Merit III - Tier 3

  • This category is for mastercard world elite cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For merchants with more than $750M in credit card receipts / year

Visa Consumer Debit - Standard

  • For visa consumer debit
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Visa Consumer Credit - CPS/Rewards 1

  • This category is for visa consumer rewards cards
  • For physical merchants this is the best rate available for this card type
  • Requires a physical card swipe so is not possible for internet or phone transactions
  • For in-person merchants this is the second best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number

Mastercard Corporate - Standard

  • For mastercard corporate credit cards
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Mastercard Consumer Rewards - Merit I - Insurance

  • This category is for consumer rewards credit cards
  • Only insurance companies can qualify for this rate, which is significantly lower than the ordinary card-not-present rate for this card type
  • Best possible rate for this card type without a physical card swipe
  • Must be settled within 3 days
  • Internet and phone transactions quality for Merit I if the transaction is electronically authorized
  • Transactions at retail merchants will downgrade to this category (from Merit III) if they are not settled within 2 days or if the card is not swiped

Mastercard World Elite Business - Data Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Credit - Standard

  • For visa consumer credit cards (including rewards cards)
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Visa Consumer Credit - CPS/Rewards 2

  • This category is for visa consumer rewards cards
  • For internet merchants this is the best rate available for this card type
  • For in-person merchants this is the second best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number

Mastercard Consumer World Elite - Merit III - Tier 1

  • This category is for mastercard world elite cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For merchants with more than $2.0B in credit card receipts / year

Mastercard Consumer Rewards - Merit I - Real Estate

  • This category is for consumer rewards credit cards
  • Only real-estate related companies can qualify for this rate, which is significantly lower than the ordinary card-not-present rate for this card type
  • Best possible rate for this card type without a physical card swipe
  • Must be settled within 3 days
  • Internet and phone transactions quality for Merit I if the transaction is electronically authorized
  • Transactions at retail merchants will downgrade to this category (from Merit III) if they are not settled within 2 days or if the card is not swiped

Mastercard Corporate - Products T&E; Rate III

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level III data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Mastercard World Business - Standard

  • For mastercard business credit cards
  • This is the worst rate available for such cards
  • For certain high risk merchants, this will the highest rate available
  • Internet merchants that are not using a secure gateway also will always get this rate
  • Electronic authorization is not required and not need not be present
  • Transaction must settle within 30 days

Mastercard Merit III Consumer Debit

  • This category is for consumer debit cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days

Mastercard Consumer Rewards - Merit III - Tier 1

  • This category is for mastercard consumer rewards cards
  • Best possible rate for an in-person transaction with this card type
  • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
  • Must be settled within 2 days
  • For merchants with more than $2.0B in credit card receipts / year

Pin Debit - Pin Entry Debit

Visa Commercial - Commercial Electronic

  • For commercial cards
  • Requires electronic authorization
  • This is the best rate available for travel-related purchases for visa commercial cards

Pin Debit vs. Signature Debit

When the customer uses a debit card he/she has the option to type in a PIN number. When the PIN number is typed in the transaction is sent over the same network that runs ATM machines. Since the ATM network is newer and has more competition, these transactions are usually the cheapest.

When no PIN is entered, the transaction is sent over the Visa and Mastercard networks. Since Visa and Mastercard have a monopoly, the transaction is more expensive when processed this way.

Mastercard World Elite Business - Products T&E; Rate II

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level II data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Mastercard Commercial - Corporate Data Rate II

  • For Mastercard Corporate Cards
  • Requires electronic authorization
  • Must settle within 2 days
  • Purchase date must be within 1 day of authorization date
  • Mag Stripe Not Required
  • Card, Cardholder and Merchant must be present and signature obtained
  • Requires level II data
    • be submitted
  • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

Visa Consumer Debit - CPS/E-Commerce Preferred - Passenger Transport

Visa Consumer Credit - CPS/Card Not Present

  • This category is for visa consumer (non-rewards, non-business) cards
  • For internet merchants this is the best rate available for this card type
  • For in-person merchants this is the second best rate available for this card type
  • Address verification (AVS) must be attempted
  • Must be settled within 2 days
  • Authorization date and transaction date must be within 7 days of each other
  • Electronic authorization must include an order number

Mastercard Consumer World - Key-Entered

  • This rate is for Mastercard consumer world cards
  • Occurs when the merchant, cardholder and credit card terminal are all present at the same place but the card's magnetic strip cannot be read
  • Customer signature is required
  • Electronic authorization is required
  • Must clear within 2 days
  • Not applicable to industries 5542 (gas stations - automated fuel dispenser), 5960 (insurance), 5962 (travel agents), 5964-5969 (direct marketing)

    • Mastercard Consumer Debit - Small Ticket

    • This category is for debit cards
    • Discounted rate with a smaller per-item fee for transactions less than $15
    • Only the following kinds of businesses can qualify for small ticket: Local commuter Transport, Taxicabs and Limousines, Bus Lines. Tolls and Bridge Fees, Restaurants, Newsstands, Laundries, Dry Cleaners, Copy shops (like Kinkos), Car Washes, Parking Lots and Garages, Movie Theaters and Videotape Rental Stores
    • Cardholder must be present and the card must be swiped and authorized at time of purchase
    • Customer signature is not required
    • Must settle within 2 days of purchase
    • Auth amount must equal settled amount except for retail sale (type 5) transactions where auth may exceed settled amount by 10% or less and Limos and Taxies.

    Downgrade

    Many business owners do not realize that the rate their credit card processor quotes them does not apply in all cases.

    Visa and Mastercard charge different interchange rates depending on the circumstances of the transaction (for example, they charge more when a rewards card is used).

    In cases where the interchange rate is higher than normal, the processor will always pass along the increased rate, this is called a downgrade. However oftentimes the processor will pass on an EVEN HIGHER rate. Since most business owners don't know that they need to negotiate their downgrade rate this additional markup can be quite large.

    In fact, in an article in the trade magazine Transactions World, a VP at Global Payments wrote "These 'downgrades'...comprise the majority of the profit...as business owners focused mainly on the “qualified” or best rate."

    The best way to avoid getting taken advantage in this way is to insist on an interchange plus processing contract, under which adding an additional markup to downgrades is not allowed. All bids on TransFS are required to be interchange plus.

    Mastercard World Business - Corporate Data Rate II

    • For Mastercard Corporate Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level II data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Visa Consumer Credit - CPS/E-Commerce Preferred - Car Rental

    Visa Commercial - Commercial - Retail

    This category is for Visa Commercial cards.

    • No travel-related services can qualify
    • For when Level II data requirements are not met
    • Must clear within 2 days
    • Purchase date must be within 1 day of authorization date

    Delivery Timeframe

    The longer the time period between when the customer's card is charged and the product is delivered, the greater the risk for the processor. Credit card processors offer better rates to businesses that deliver the product to the customer at the time of payment and worse rates to businesses that deliver the product to the customer a long time after payment.

    Mastercard Commercial - Data Rate III

    • For Mastercard Corporate Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level III data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Visa Consumer Credit - CPS/Small Ticket

    • This category is for consumer credit cards, including rewards cards
    • Discounted rate with a smaller per-item fee for transactions less than $15
    • Only the following kinds of businesses can qualify for small ticket: Local commuter Transport, Taxicabs and Limousines, Bus Lines. Tolls and Bridge Fees, Restaurants, Newsstands, Laundries, Dry Cleaners, Copy shops (like Kinkos), Car Washes, Parking Lots and Garages, Movie Theaters and Videotape Rental Stores
    • Cardholder must be present and the card must be swiped and authorized at time of purchase
    • Customer signature is not required
    • Must clear within 2 days
    • Purchase date must be within 1 day of authorization date

    Credit Card Processor

    Processors mark up the price of credit card processing more for small businesses because they have less bargaining power and are not as well informed. Each year credit card processors collect about $7B of fees from merchants on top of the interchange fees collected by the credit card issuers and visa and mastercard.

    To accept credit cards a merchant must sign a contract with a credit card processor. In return, the processor provides access to one of the processing networks over which the transactions actually flow. The processor is also responsible for customer service and billing the merchant.

    There are some very large processors, like First Data, that own their own processing networks. There are also many smaller processors (in the industry lingo they are called ISOs) that contract with the larger processors to use their networks.

    Each business negotiates the processor's markup independently, so the amount of this markup depends on the situation and the negotiating power of the business. Generally smaller businesses face higher rates than larger businesses.

    Mastercard Consumer Debit - Key-Entered

  • This rate is for Mastercard consumer debit cards
  • Occurs when the merchant, cardholder and credit card terminal are all present at the same place but the card's magnetic strip cannot be read
  • Customer signature is required
  • Electronic authorization is required
  • Must clear within 2 days
  • Not applicable to industries 5542 (gas stations - automated fuel dispenser), 5960 (insurance), 5962 (travel agents), 5964-5969 (direct marketing)

    • Mastercard Commercial - Commercial Data Rate II Petroleum

    • For Mastercard Corporate Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level II data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Visa Consumer Credit - Electronic Interchange Rate (EIRF)

    This category is for Visa consumer credit cards (non-rewards and non-business).

    EIRF is a very common downgrade for E-Commerce merchants but it can also hit physical merchants as well. Some reasons why a transaction will downgrade to EIRF are:

    • Invoice or order number not entered
    • Not entering the billing address street number and zip code (do not need to match)
    • Authorization and settlement amount not matching
    • Transaction not batching with in 24 hours

    For ecommerce merchants the above circumstances are most likely to happen when manually entering or modifying orders at using the virtual terminal. Physical merchants often experience EIRF on every keyed-in transaction because it is cumbersome to enter the customer's address on many terminals and POS systems.

    Most Recent Merchant Statement

    Processors are usually willing to offer much better deals to businesses that already accept credit cards. Providing your last month's statement proves that you already accept credit cards and encourages the processors to bid aggressively for your business.

    Mastercard World Business - Corporate Purchasing - Data Rate II

    • For Mastercard Corporate Purchasing Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level II data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Visa Consumer Debit - CPS/E-Commerce Preferred - Hotel

    Issuing Bank

    Unlike Discover and American Express, which issue their own cards, Visa and Mastercards are issued by banks. The banks make profit on the credit cards in two ways: 1. On every transaction they collect a fee from the merchant called an interchange fee 2. They charge interest and other fees to the cardholder. There are thousands of issuing banks, but the market in the US is heavily dominated by a few large firms: List of Largest Credit Card Issuers in 2006.

    Mastercard Consumer Credit - Key-Entered

  • This rate is for Mastercard consumer (non-business, non-rewards) credit cards
  • Occurs when the merchant, cardholder and credit card terminal are all present at the same place but the card's magnetic strip cannot be read
  • Customer signature is required
  • Electronic authorization is required
  • Must clear within 2 days
  • Not applicable to industries 5542 (gas stations - automated fuel dispenser), 5960 (insurance), 5962 (travel agents), 5964-5969 (direct marketing)

    • Visa Consumer Debit - CPS/Small Ticket

    • This category is for debit cards
    • Discounted rate with a smaller per-item fee for transactions less than $15
    • Only the following kinds of businesses can qualify for small ticket: Local commuter Transport, Taxicabs and Limousines, Bus Lines. Tolls and Bridge Fees, Restaurants, Newsstands, Laundries, Dry Cleaners, Copy shops (like Kinkos), Car Washes, Parking Lots and Garages, Movie Theaters and Videotape Rental Stores
    • Cardholder must be present and the card must be swiped and authorized at time of purchase
    • Customer signature is not required

    Mastercard Corporate - Corporate Data Rate II

    • For Mastercard Corporate Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level II data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Mastercard Commercial - Business Data Rate II

    • For Mastercard Business Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level II data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

    Visa Consumer Debit - CPS/E-Commerce Preferred - Car Rental

    Visa Consumer Debit - Electronic Interchange Rate (EIRF)

    This category is for Visa debit cards.

    EIRF is a very common downgrade for E-Commerce merchants but it can also hit physical merchants as well. Some reasons why a transaction will downgrade to EIRF are:

    • Invoice or order number not entered
    • Not entering the billing address street number and zip code (do not need to match)
    • Authorization and settlement amount not matching
    • Transaction not batching with in 24 hours

    For ecommerce merchants the above circumstances are most likely to happen when manually entering or modifying orders at using the virtual terminal. Physical merchants often experience EIRF on every keyed-in transaction because it is cumbersome to enter the customer's address on many terminals and POS systems.

    Mastercard Consumer World - Merit III - Tier 3

    Mastercard World Cards are a special variety of rewards card (article in the NYTimes) designed to compete with American Express (press release).

    • This category is for consumer (non-rewards, non business) credit cards
    • Best possible rate for an in-person transaction with this card type
    • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
    • Must be settled within 2 days
    • For businesses with more than $750 million in credit card receipts per year

    Visa Consumer Credit - CPS/Retail - Tier 3

    • This category is for visa consumer credit (non-rewards, non-business) cards
    • Best possible rate for an in-person transaction with this card type
    • Only businesses with more than $750M in annual volume can qualify for this rate
    • Card must be swiped and electronically authorized, so e-commerce and phone orders cannot qualify
    • Must be settled within 2 days
    • Authorization and transaction date must be within one day of each other

    Assessments

    Part of each transaction is kept by Visa and Mastercard themselves. Visa charges 0.0925% while Mastercard charges 0.095%. A longer explanation of assessments is available on our blog: visa and mastercard assessments.

    Mastercard Commercial - Products T&E; Rate III

    • For Mastercard Corporate Cards
    • Requires electronic authorization
    • Must settle within 2 days
    • Purchase date must be within 1 day of authorization date
    • Mag Stripe Not Required
    • Card, Cardholder and Merchant must be present and signature obtained
    • Requires level III data
      • be submitted
    • Not available to the following industries (MCCs) - Airline (3000-3299, 4511), Vehicle Rental (3351-3500, 7512, 7513, 7519), Lodging (3501-3999, 7011), Passenger Railway (4112), Restaurant (5812), Marinas (4468), Service Stations (5541), Automated Fuel Dispensers (5542), Convenience Stores (5499), Fuel Dealers (5983) and Truck Stops (7511)

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