Forums: Discussions for entrepreneurs and small business.

Hi everybody, first time poster. :) I am starting an online gourmet food store with my sister. We are almost ready to open, and are working on final business. We already have a dilemma!

We have been told conflicting information from two merchant accounts and we don`t know who to listen to. For those of you that take online credit cards, how does your merchant account process these purchases - qualified, or midqualified?

We have one merchant that tells us up front that most of our purchases will be mid qualified. We have another that says no, most of them will be qualified and that the only way they will be mid qualified is if they type their address incorrectly for AVS.

We had advice from another business owner that says that all online purchases are only mid qualified because it isn`t a face to face transaction.

Does anybody else have experience with this? We don`t know who to believe!

Thanks so much!




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http://www.ifancyfood.com

If the address for billing that is entered, does not match the billing address for the credit card , you usually pay more.

Do you get a qualified rate on all others that pass AVS?  I really hope it works that way - if they all start at mid and get bumped down to non, this is going to get really expensive.

Thanks for the response!
Jennifer


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http://www.ifancyfood.com

This should clarify the issue for  you.

QUALIFIED means card-in-hand face-to-face swiped through a card reader.  So if you are an internet business, none of your sales will be qualified.  All will be either mid or non qualified.

MID QUALIFIED includes all:  commercial cards, business cards, corporate cards, purchasing or fleet cards, rewards cards, AVS (Address Verification) missing or non-match, of course all non-swiped cards regardless of card type, and some others.

NON QUALIFIED means anything that fails to qualify for mid-qualified, mostly foreign cards, batches not settled in a timely manner (i.e. daily), and some others.

In  your case,  you can probably expect these approximate ballpark numbers:
Qualified:  0% of sales
Mid Qualfied:  80% of sales
Non qualified:  20% of sales

Be aware of several caveots: 
One--surcharges from qualified to mid, and from mid to non, can vary widely and you can very easily get ripped.  Difference shouldn`t be much more than 50 BP or so, in other words, if your qualified rate is 1.59%, your mid shouldn`t be much more than 1.59 plus 50 equals 2.09%.
Some processors charge 2-3-4 times that much.

Two--the `rules` that define what is qualfied, what is mid, and what is non, are open to interpretation.  What is MID qualified to one processor is NON qualified to another. 
Moral:  make sure  you deal with a reputable well known processor, not some huckster who dazzles you with `such a deal`.

If you need more info or some numbers from major processors like Bank of America, HSBC, Intuit or others, please contact me.  Thanks, and good luck with your business.

AMSPCS
amspcs@juno.com
www.MerchantServices-help.com

Thank you so much for your help! Your 80% answer was what I was afraid of. I`m glad to know before it is too late.

(And the one that said we`d hardly have any mids also charged a full 1 percent higher for mids)


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http://www.ifancyfood.com