• Lack of Oversight and Government 
    ​Regulation Gives Credit Card Processors 
    ​Free Rein to ​Overbill Merchants. 

Bucket Billing

The processor takes the 1000+ Interchange categories and divides them into three (3) Buckets:


1) Qualified

2) Mid-Qualified

3) Non-Qualified 


This is an example of a merchant that processed a Debit Transaction that the processor put into the nebulous “Qualified Bucket” and charged the merchant 1.85%.

Even though the processor will never show you, when it is broken down we see what is actually being charged:

  • Visa Debit 0.05% (see the Keeping Debit Rebates section)

  • Visa Dues & Assessment 0.11%

  • Processor Discount Rate 1.69%


The merchant thinks they are paying a 0.20% Discount Rate, not 1.69%. The Discount Rate should only be 0.07%.  


Getting transactions to clear at the correct Interchange rates can save a merchant 1% or more! When the transactions are in buckets, there is no way of telling if the Non-Qualified Transaction is a Purchasing Card that cleared at Standard (2.95%, from lack of information being passed due to the wrong Gateway or Virtual Terminal, etc.), or is a Purchasing Card that cleared at Level III (1.80%), or something else such as a Business Card, etc.


If the transaction was Standard, the processor made 0.20%. If the transaction was Level III, the processor made 1.35%.


Worse than not knowing the true Discount Rate, if the transaction cleared at Level III, the merchant is doing everything by the book and no money is being wasted in unnecessary Interchange Fees. However, if the transaction cleared at Standard, then the merchant is paying an extra 1.15% in Interchange Fees and has no idea why or how to fix it. You can’t fix what you can’t see. And the processor is actively hiding the areas that need fixing.


  • Very easy to detect

  • Does not require an audit to uncover

  • Found on about 10% of audits

  • Primarily found on small  merchants 


M​uch like the bucket billing Qualified, Mid Qualified, and Non-Qualified model above, Square has the same billing concept.    

Qualified - Swiped Transactions 2.6 + 10 Cents
Mid-Qualified - eCommerce Transactions 2.9 + 30 cents
Non-Qualified - 3.5% and 15 cents  

While the names have been changed, the game is still the same. They tell the merchant that "credit card processing is too complicated to understand, but no worries, we make it easy! We over-bill you one of three simple rates."  We have tried and tried, and we can not find where a merchant is better off with Square bundling of rates except if you are a very small company processing less than $10,000 a year - and even then, it's questionable.

This type of billing is by far the worst! It is like when you see items on a sale table and everything on it cost $20.00. You know nothing on that table is worth $21.00 let alone $50.00. Everything on that table costs between $1.00 - $20.00 and they make it easy by saying you can pay $20.00 for any of it, regardless of its true worth. Hopefully, you know that is not a good deal, regardless of the sign.  

As you can see in the table to the left, Square is higher in all the most common retail interchange categories. They also lost in the card-not-present scenarios we ran. Yes, it is simple, just like everything on the table is only $20.00.  So why pay more? Is it because they have the best technology, readers and POS systems? You can get that for a fraction of the cost as well. 

This may explain the "F" rating by the Better Business Bureau and the thousands of complaints. 

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