Why do Visa & MasterCard have 4 different business cards, Tier, 1,2,3 &4

Ever wondered by Visa & MasterCard have 4 different business cards?

Technically there are more than 4, but today I am referring to the Tiers 1,2,3 & 4 you most likely see on your statement. (not to be confused with level 2 & 3 processing)

These Tiers are out of your control and not caused by anything  you’re doing wrong, unlike the  EIRF, STND or Standard you may see on your statement.

These tiers/levels are Annual Account Spend and believe it or not, are based on how much your customers pay spends with this card.  The more money spent, the higher your interchange rates for these cards.

Seems illogical but the more money your customer pays, the higher interchange rate your charged.


Visa Customer Annual Spend

VISA BUSINESS TIER 1 CARD  Less than $20,000

VISA BUSINESS TIER 2 CARD  $20,001 – $39,999

VISA BUSINESS TIER 3 CARD  $40,000 – $99,999



MasterCard Customer Annual Spend

MC BUSINESS LVL 1 CARD Less than $25,000

MC BUSINESS LVL 2 CARD $25,001 – $50,000

MC BUSINESS LVL 3 CARD $50,001 – $100,000

MC BUSINESS LVL 4 CARD Over $100,000

Even though these interchange rates are out of your control you can reduce some of these transactions by making sure eligible transactions clear at level 2 or level 3 interchange rates.  Note: Visa business cards are not eligible for level 3 interchange rates but can qualify at level 2 interchange rates.

Setting up a merchant account to accept commercial, B2B & government cards is much different than a standard retail merchant account.  These are the only cards you accept that have 3 different interchange rates.

Remember, commercial, B2B cards qualify 1 of 3 interchange rates. Level 1, level 2 or level 3.   Having a general knowledge of rates and how the fees that impact your bottom line are derived, will  help you make informed businesses decisions when choosing a processor  who understands the B2B & B2G payment space.

Even if someone is honestly trying to do a good job for you, their inexperience when it comes to interchange and commercial credit cards could be driving your expenses up.

Questions? Give us a call  888 790 3450


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