Question on MasterCard rate COML LARGE TICKET 2 FLEET

Q&A with author Christine Speedy. This response is related to an excerpt from yesterdays enewsletter:

Subject: Business to business credit card rate reduction. Sending level 3 data can reduce interchange fees over 1%. Not all processors support level 3, and even if yours does, you may not qualify for them. Validate if you’re getting level 3 on your merchant statement with these examples:

  • NONQUALIFIED: corp data rate 1, corp data rate 2, bus std, EIRF.
  • BEST QUALIFIED: corp prd 3, EVPSCRPDATAR3, Commercial Data Rate 3

If not , it could be your processor, your price plan, your merchant account set up, or the terminal you’re using that is the cause. Contact your representative to find out which. Contact me if you want technology, not people, to manage how transactions qualify.
CenPOS has supported level 3 data for retail and key entered. NEW, CenPOS supports level 3 for customer initiated payments on our hosted pay pages, including electronic bill presentment and payment (EBPP). Call for help to take advantage of this service (no extra fee).

Customer Question: We have a customer who uses a level III card to pay multiple invoices at once. This charge is always relatively large, and we’ve noticed it’s categorized under the MasterCard section – “COML LARGE TICKET 2 FLEET”. Would you know what this category is, and if it is associated with level III at all?

Answer: Below is screenshot of  page 93 from the MasterCard U.S. and Interregional Interchange Rates and Criteria, effective as of October 2012. (That’s the most recent from  MasterCard.)

mastercard commercial large ticket 2

For the card presented, the interchange fees are the same for both large ticket sales. Large ticket 3 requires $100,000 sale minimum. The sale was between $25,000 an $99,999.99, thus the transaction qualified at the proper category. If the sale was $100,000 or more, then it would not be the lowest qualified interchange category. Since the rate is the same, there is no financial difference, however,  MasterCard could change the rates, so it’s important to always qualify for the right interchange bucket.


non-profit credit card processing rate video generates threat

I made a video about Non-profit credit card processing rates telling non-profit merchants what to look for on their merchant statements to know if they are qualifying for special credit card processing interchange rates they are entitled to as a non-profit. If a non-profit does not see this data on their merchant statement, I tell them to call me and I’ll help them out. I give free information to non-profits all the time, to enable them to use more dollars for their intended programs rather than paying it in credit card processing fees.

Captain Morgan (his youtube handle) is threatening me saying this is misleading advertising. “there are NO special interchange rates for Non-Profit businesses”. He’s going to report me to the card associations and everyone else who will listen.

Here’s an example of interchange rates. All “for profit” merchants can qualify for .95% signature debit. All  501(c)(3) merchants can can qualify for .80% signature debit for the same transaction.  Is that not a special rate?  CaptMorgan would have  you believe that Visa/Mastercard simply hands over these rates to everyone. But that’s not true. By rule, any non-profit can QUALIFY for these rates. But that doesn’t mean their PROCESSOR GIVES them those rates. The card associations set the interchange rates, but it’s up to the payment processor to decide what they’ll actually charge merchants.

Technically the two rates above are called CPS/RETAIL and CPS/RETAIL2 EMERGING MARKETS. There are a select few types of businesses that can participate in EMERGING MARKETS interchange rates. If the merchant is one of the qualified types of business, the proper corresponding SIC code on the merchant account set up will drive the ability for the merchant to hit emerging market interchange rates.

If all the credit card processing companies were doing such a bang up job, I’d have never made the video. But after seeing one too many merchant statements with the non-profit not qualifying for emerging market rates, I did something about it. Here’s the kicker. On a ‘pass through’ or wholesale price plan, the merchant pays interchange plus a merchant discount. (That’s the short version, though it’s much more complicated than that.) If the non-profit is set up incorrectly, they’ll pay .95%, for example, instead of .80%. The processor does not make any money on interchange.  NONE of the .15% difference goes to the processor.  But because some salesperson has no idea what they are doing, and it happens ALL THE TIME, the non-profit frequently pays more.  The salesperson doesn’t benefit, the processor doesn’t benefit, and the merchant pays.

CAPTMORGAN comment: “Are their special credit card processing rates for non-profits….? The answer to that is NO… NOT in any way…. ? This lady is full of it….. Visa / MC considers all markets by which they have limited presence in to be “emerging markets”. These markets are specifically; government, schools, utilities, insurance, cable / broadband, and pay television (OD); – nothing more…”

I think his comment is contradictory. YES, there are other types of merchants that ALSO qualify for emerging market interchange rates. I could have mentioned all of them in the video, but then, it would have been too long. If I did mention it, I’d give the same information and advice. Because I’ve also rarely seen a merchant statement for a government, school, utility, insurance, cable / broadband, or pay television that had emerging markets on their interchange qualification. How does this happen? If the merchant has been with the same processor for a long time, the emerging markets category may have been created after the account was established. With the wrong SIC code, the merchant never qualifies for the special interchange rates because nobody at the processor is watching out for their client and the client doesn’t know these rates exist, what to look for, or they are not given enough information to figure it out.

I listened to my Non-profit Credit card processing rates video two more times to see if I have some potential liability.  Hey- who want’s trouble? I could, and probably should,  take it down just to avoid any remote chance of trouble. But after listening again, I don’t see anything wrong with it. You be the judge. Watch the video. Do you think it’s misleading or false advertising? Does this guy not have anything better to do than to try and make life difficult for others?

Please write your comments on the video or blog. Thanks!