Credit Card Processing

Merit 3 MasterCard Credit Card Processing Fees

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Merit 3 (or Merit III) is a MasterCard interchange qualification for credit and debit card processing fees.

Merit 3 is MasterCard fancy way of referring to a card-present transaction. Merit 3 can actually apply to several different interchange categories based on card brand, type and qualification.


Merit 3 (or Merit III) is a MasterCard interchange qualification for credit and debit card processing fees. A Merit 3 transaction is settled within one day of authorization and is processed by electronically reading information from a customer’s card. This type of transaction is known as a card-present or signature transaction.

The Merit 3 qualification has more to do with how a transaction is processed than what kind of card is being processed. Merit 3 means that a transaction is processed by using a piece of electronic equipment such as a credit card machine to read and transmit the information on the card’s magnetic strip.

The Merit 3 qualification can apply to credit cards and debit cards across different card categories such as World, Enhanced or High Value. Merit 3 is associated with MasterCard’s lowest interchange rates for a given category.

Each Merit 3 MasterCard interchange category has three pricing tiers used to provide lower rates to businesses that have higher gross MasterCard sales volume. Merit 3 Base does not have a volume requirement and has the highest associated interchange fee, followed by Tier 3 that requires $750 million annual sales and has a slightly lower interchange fee, then Tier 2 which requires $1.25 billion, and finally Tier 1 which has the lowest interchange fee and requires $2 billion in annual sales.

In Other Words…

MasterCard uses a number of variables such as card type (credit or debit), card category (core, rewards, etc.) and processing method (card present or card not present) to determine the rate that will apply to a given transaction.

Merit 3 is the term that MasterCard uses to refer to a card present transaction. Since the term Merit 3 refers to how a transaction is processed, it is used in reference to transactions across a range of categories.

For example, a swiped credit card transaction can be qualified as Merit 3, just like a swiped debit card transaction. Even though these transactions involve different card types, they are both swiped, and therefore may qualify as Merit 3.

Merit 3 Credit Card Interchange Categories

Each of the following MasterCard credit card categories have Merit 3 qualification for three different pricing tiers that include Base, Tier 1, Tier 2 and Tier 3.

  • Merit 3 (Core Value)
  • Enhanced Merit 3
  • World Merit 3
  • World Elite Merit 3
  • High Value Merit 3

Merit 3 Debit Card Interchange Categories

Each of the following MasterCard debit card categories have Merit 3 qualification for three different pricing tiers that include Base, Tier 1, Tier 2 and Tier 3. Unlike credit card categories, debit card interchange fees were capped effective October 1, 2011 by the Durbin Amendment. As a result, MasterCard created an additional set or regulated debit card interchange categories.

  • Merit 3 (Core Value)
  • Merit 3 Regulated

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Ben Dwyer

BY Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing.As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.

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