How do I determine my merchant tier? What is my merchant level? Can I get lower rates with a different merchant level? What are level 4 PCI Compliance requirements? Merchants are rightfully confused about their merchant level, especially small businesses because many times I have heard a smaller company say. “We renegotiated our rate. Our processor told us our volume has grown so they moved us up to the next level.”
I’ve never actually encountered a company that met the criteria for ‘lower rates’ based on qualifying for a new level. See the threshold level chart. This is where the confusion starts.
As you can see, only the largest companies qualify for special lower interchange rates and it is based on VOLUME meeting a specific threshold level. What happens is the salesperson makes up a story to retain the account, or the merchant processor has their own internal criteria that they use to ‘qualify’ a merchant for different rate levels they use. These are not directly tied to interchange, but rather directly tied to the merchant processor profits.
What most merchants need to be concerned about is what level they are required to meet for PCI Compliance because most of them will never qualify for lower interchange tiers. PCI Compliance transaction volumes do not correlate to Visa interchange threshold levels.
| Level / Tier | Merchant Criteria | Validation Requirements |
|---|---|---|
| 1 | Merchants processing over 6 million Visa transactions annually (all channels) or Global merchants identified as Level 1 by any Visa region 2 |
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| 2 | Merchants processing 1 million to 6 million Visa transactions annually (all channels) |
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| 3 | Merchants processing 20,000 to 1 million Visa e-commerce transactions annually |
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| 4 | Merchants processing less than 20,000 Visa e-commerce transactions annually and all other merchants processing up to 1 million Visa transactions annually |
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