What it is
A downgrade happens when a transaction fails to meet the requirements of its intended interchange category and falls into a pricier one. Late settlement, missing data and keyed cards are common causes.
What it costs you
Downgrades can add 0.5% or more to affected sales. On tiered pricing they often appear as mid- or non-qualified surcharges.
What to do about it
- Settle batches daily
- Send AVS and Level 2 / Level 3 data where it applies
- Review non-qualified volume each month