Interchange FAQ
Q: What is MDR?
A: MDR (Merchant Discount Rate) is the amount a merchant is charged for processing transactions. MDR is impacted by several cost components including Interchange or Wholesale Discount, assessments, processing, settlement and reporting fees. This means your MDR could include Qualified Fees, Non-Qualified Fees and Differential Fees.
Q: What is Interchange Rate?
A: Interchange is the amount that card processors – in this case, Moneris Solutions – are required to pay credit card issuers/financial institution for each credit card transaction. Interchange rates are set and regulated by the card brands (i.e. Visa and MasterCard).
Q: What is Wholesale Discount Rate?
A: Wholesale Discount Rate is the amount that card processors – in this case, Moneris Solutions – are required to pay a credit card issuers/financial institution for each credit card transaction. Wholesale Discount Rates are set by American Express.
Q: What is a Target Qualification Level?
A: The Target Qualification Level is the Interchange or Wholesale Discount Rate that is expected (or ‘targeted’) to be applied to your transactions. This is what determines a qualified transaction versus a non-qualified transaction. It is typically set at the Consumer Electronic Rate for each card brand (i.e. Visa and MasterCard). Your MDR is based on the assumption that your transactions will satisfy the criteria, established by the card brands, to meet the Target Qualification Level.
Q: What is Qualified Fee?
A: A qualified fee is the base rate applied to all transactions. A transaction with an Interchange or Wholesale Discount Rate that is equal to or below your Target Qualification Level is considered a qualified transaction. For qualified transactions, a Qualified Fee will be the only fee applied.
Q: What is a Non-Qualified fee?
A. A non-qualified fee is applied in addition to the Qualified Fee for non-qualified transactions and compensates for higher costs and risks associated with these transactions. A transaction with a Rate that is higher than your Target Qualification Level is considered a non-qualified transaction and is subject to a Qualified Fee, a Non-Qualified Fee and a Differential Fee. (Examples of non-qualified transactions are manually key entered transactions, corporate card transactions, premium card transactions and card not present transactions.)
Q: What is the Differential Fee?
A: A differential fee is applied in addition to the Qualified and Non-Qualified Fees for non-qualified transactions and compensates for higher costs and risks associated with these transactions. A transaction with a Rate that is higher than your Target Qualification Level is considered a non-qualified transaction and is subject to a Qualified Fee, a Non-Qualified Fee and a Differential Fee. The Differential Fee is equal to the difference between the Rate associated with your Target Qualification Level and the Rate associated with the non-qualified transaction. (Examples of non-qualified transactions are manually key entered transactions, corporate card transactions, premium card transactions and card not present transactions.)
Q: Where can I find information on the Interchange fees and levels?
A: Merchants are encouraged to visit the card brand sites for more information on Interchange fees.
Q: When will I see the change in my rates?
A: New rates are effective May 1, 2015, or June 1, 2015, depending on your business type. As always, please check your Moneris statement for specific details about rate updates and how they apply to your account.
Q: How will this new pricing adjustment affect me? What will my savings be?
A: Impacts of new pricing changes are based on a number of factors specific to each business. We are happy to discuss rates and pricing with you. Please contact us at 1-844-204-8626 to discuss the specific impacts to you and your business.
Q: How will I be notified?
A: All qualified IB merchants affected by the pricing change have already been notified by statement message via Merchant Direct and qualified National accounts will receive a letter. If you have any questions regarding these changes, please contact us at 1-844-204-8626, or contact your National Account Manager.
Q: Will there be any changes to my statement?
A: There will be no significant changes to the structure or format of your statement. There will be changes to some fee programs and card descriptors listed in the details of your statement.
Q: When my rate changes, do I enter a new contract term with you?
A: No, the terms and conditions of your merchant agreement remain in effect. Your contract term does not change in any way as a result of this adjustment.
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