Credit Card Processing: A Primer

More-reputable processors either will ask you for more information to avoid a downgrade or plug in a reference number to substitute for the missing data to help you avoid the downgrade charge.

Watch for Tricks

One processor quoted a merchant a rate of 1.43 percent for qualified charges, and 1.6 percent for downgraded charges. What the merchant didn’t realize, however, was that the fine print in the contract made the second charge a supplement to the first, not a replacement. Downgraded charges were being billed at 1.4 percent plus 1.6 percent, for a total of more than 3 percent each! And of course, the processor reported that every single charge was downgraded.