and the simplest system for most merchants to understand, if not the most transparent. The newer six-tier pricing, including additional tiers covering debit, business, or international cards is gaining in popularity. In three-tier pricing, the merchant account provider groups the transactions into three groups (tiers) and assigns a rate to each tier based on a criterion established for each tier. A possible drawback from the merchant's perspective is that these "tiers" or "buckets" are variable from one processor to the next prohibiting any direct comparison from a tier-one provided by one provider to a tier-one provided by another provider. First tier – qualified rate A qualified rate is the percentage rate a merchant will be charged whenever they accept a regular consumer credit card and process it in a manner defined as "standard" by their merchant account provider using an approved credit card processing solution. This is usually the lowest rate a merchant will incur when accepting a credit card. The qualified rate is also the rate commonly quoted to a merchant when they inquire about pricing. The qualified rate is created based on the way a merchant will be accepting a majority of their credit cards. For example, for an Internet merchant, the Internet interchange categories will be defined as qualified, while for a physical retailer only transactions swiped through or read by their terminal in an ordinary manner will be defined as qualified. Second tier – mid-qualified rate Also known as a partially qualified rate, the mid-qualified rate is the percentage rate a merchant will be charged whenever they accept a credit card that does not qualify for the lowest rate (the qualified rate). This may happen for several reasons such as: A consumer credit card is keyed into a credit card terminal instead of being swiped A special kind of credit card is used like a rewards card or a business card A mid-qualified rate is higher than a qualified rate. Some of the transactions that are usually grouped into the mid-qualified tier can cost the provider more in interchange costs, so the merchant account providers do make a markup on these rates. The use of "rewards cards" can be as high as 40% of transactions. So it is important that the financial impact of this fee be understood. Third tier – non-qualified rate The non-qualified rate is usually the highest percentage rate a merchant will be