The mid-qualified rate (also called "mid-qual") is the middle pricing tier in a tiered pricing model, sitting between the qualified rate (lowest) and non-qualified rate (highest). Mid-qualified transactions typically include: rewards credit cards swiped in person, basic credit cards that are keyed in rather than swiped, or transactions with certain data requirements not fully met.
Common transactions that land in mid-qualified: - Consumer rewards credit cards (airline miles, cash back) swiped in person - Basic consumer credit cards that are manually keyed (instead of swiped/dipped) - Transactions with partial address verification data - Cards that required manual authorization
The mid-qualified rate adds a "mid-qualification surcharge" to the qualified rate. This surcharge is the processor's additional profit on these transactions. The surcharge is not standardized — it's set by the processor and can range from 0.50% to 1.50% above the qualified rate.
Unlike interchange plus pricing (where each card type pays its exact interchange rate), mid-qualified lumps together many different card types into one rate bucket. A basic rewards card (with a real interchange cost of perhaps 1.85%) might be placed in the same mid-qualified bucket as a more expensive card (with a real cost of 2.25%) — the merchant pays the same rate regardless.
The mid-qualified rate is often where processors hide significant profit margin. A processor might claim your transactions are mostly "qualified" when many are actually being downgraded to mid-qualified.
If you're on tiered pricing, request a detailed breakdown of what percentage of your transactions fall into each tier. If mid-qualified exceeds 30-40%, you're likely paying significantly more than you would on interchange plus.
A coffee shop's typical transaction mix on tiered pricing: - Customer 1 pays with Chase Freedom (basic rewards card, swiped): MID-QUALIFIED at 2.79% - Customer 2 pays with Visa debit (swiped): QUALIFIED at 1.79% - Customer 3 pays with Amex Platinum (premium rewards, swiped): NON-QUALIFIED at 3.59% - Customer 4 pays with basic Visa (swiped): QUALIFIED at 1.79% - Most customers use rewards cards → most transactions are mid or non-qualified
Most processors place rewards cards in the mid-qualified or non-qualified tier because the actual interchange cost for rewards cards is higher. The tiered structure allows them to charge a premium on these common card types.
The most effective way is to switch from tiered to interchange plus pricing. Under interchange plus, rewards cards simply pay their actual interchange rate — there's no tiered surcharge on top.
Liberty Bancard eliminates mid-qualified rates entirely. Every transaction pays its actual interchange cost — no tiered bundling, no arbitrary surcharges. See the difference in a free statement analysis.
Continue learning: Browse all 60 payment processing terms in our Payment Processing Glossary, or upload your statement for a free analysis of your current processing costs.