Law firms and other professional services businesses often have tax exempt sales. Regarding credit card processing interchange rates, if Visa Level II is only applicable on transactions with sales tax, does this mean Comm Card Elec transactions that are at 2.95% cannot qualify for Level II and lower rate?
Not exactly. Merchants, including law firms, can qualify for lower rates than 2.95% for corporate cards. The merchant must have a qualified business code (MCC) as submitted on their merchant application. The transaction must also be supplied with the correct data to qualify the transaction, which may vary depending on different factors.
Below is related information from Visa. Visa does not publish the ‘qualification criteria’ for different rate types, leaving it up to merchants to figure it out, or to rely upon their credit card processing vendor to help them.
Visa International Operating Regulations April 2012:
Commercial Card – Non-Travel Service, Level II Interchange Reimbursement Fee – U.S. Region In the U.S. Region, the Commercial Level II (non-Travel Service Category) Interchange Reimbursement Fee is available for taxable Commercial Visa Product Transactions that are CPS-qualified and meet certain additional data requirements as specified in the U.S. Interchange Reimbursement Fee Rate Qualification Guide. Tax-exempt Commercial Visa Product Transactions and Commercial Visa Product Transactions using the CPS/Account Funding program are not eligible for the Commercial Level II (non-Travel Service Category) Interchange Reimbursement Fee.
Commercial Card Business-to-Business (B2B) Interchange Reimbursement Fee – U.S. Region
In the U.S. Region, Commercial Visa Product Transactions that do not meet the Level II Enhanced Data requirement will qualify for the Commercial Business-to-Business Interchange Reimbursement Fee. To qualify for this program, the Transaction must be CPS-qualified as specified in the U.S. Interchange Reimbursement Fee Rate Qualification Guide and be completed at a Merchant properly assigned a business-to-business Merchant Category Code as specified in the Visa Merchant Data Standards Manual.
EDITORS NOTE: Looking at the Visa chart above, can you tell which rates are ‘qualified’ or ‘non-qualified’? No. And that’s the difficulty merchants, CFO’s,CPA’s and controllers face every day. The qualified rate rules are also different for MasterCard corporate cards which will be addressed in a later article.
CenPOS is a universal payment processing platform that provides efficiencies for merchants and their customers, reduces PCI DSS compliance burden, and many other benefits, including, CenPOS is an intelligent payment processing platform that replaces inefficient and outdated solutions. A key differentiator is the proprietary way CenPOS helps merchants qualify transactions automatically. Unlike other solutions, it doesn’t rely on employees to do the right thing at the time of transaction.
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