How to Avoid Processing Downgrades
Most merchants are billed under a 3-tiered pricing schedule for card processing. At the top of the tier is the Qualified Rate. This is generally the best rate available and is typically applied in cases where a standard consumer credit card is used, the cardholder is present, the card is swiped, and the transaction is settled or batched out within 24 hours.
Transactions that deviate from this may be "downgraded" to either a Mid-Qualified Rate or a Non-Qualified Rate, both of which incur a greater cost of processing and, thus, a higher rate to you, the merchant.
Several factors can cause a downgrade to a higher processing rate:
1. You process a card that has a higher cost associated with it than standard consumer cards (e.g., a reward card or a corporate/business credit card).
2. You take certain actions -- or fail to take them -- during processing (e.g., the card is manually entered or keyed without any Address Verification System [AVS] info).
The following rates for Retail/Swiped Accounts are charged when all of the following occur:
- Standard consumer credit card is used
- Credit card is swiped
- Transaction is settled or batched out within 24 hours
- A reward card is used
- Credit card is manually entered or keyed in and AVS information supplied
- Corporate, business or government credit card is used without line item detail included
- Credit card is manually entered or keyed in without any AVS info
- Authorization is made, but not captured until after 24 hours
- Transaction is not settled or batched out within 24 hours
In general, the same criteria apply to Internet or Keyed Accounts (such as an Internet Merchant Account).
Get the Best Rate
If you experience a large number of downgrades, consider these steps:
- Check your statement -- Many times your merchant account statement will have a description next to each downgrade, describing why the transaction was downgraded. If you need help understanding these items, please contact PNC Merchant Services® Customer Service at 800-742-5030.
- Close out -- To avoid downgrades caused by not closing the credit card batch in your terminal, consider having your terminal programmed to auto-settle every night.
- Swipe -- To avoid downgrades caused by not swiping the card through the terminal, be sure to swipe every transaction, rather than keying in the account number. If your terminal is no longer reading credit cards, consider replacing your machine.
Please contact PNC Merchant Services Customer Service at 800-742-5030 if you have questions on downgrades.