The Hidden Billback, a Deceptive Non-qualified Fee

The practice of “enhanced billback” (aka enhanced reduced recovery, mixed rate, or blended rate) is when a processor charges an inflated fee for transactions that qualify at a higher interchange than the specified incentive rate written on the merchants’ contract. The non-qualified transaction fee is then retroactively charged to merchants the following month. These fees are often nearly a full percent more than the qualified card rate.


In most cases this tactic is used by Merchant Level Sales (MLS) people from Independent Sales Orgainzations (ISO’s) to lure merchants into signing long term contracts that seem too good to pass up. MLS’s thrive on unsuspecting business owners to make sales quotas and high commissions. Victims of these tactics find themselves in financially difficult situations that are too costly to terminate.

Questionable sales practices from Wells Fargo Merchant Services LLC were spawned during an ongoing investigation of their earlier banking practices. Wells Fargo has been known to have among the highest fees in the industry according to online reviews that criticized the bank’s fee policies. As a result, Wells Fargo could face another class action lawsuit along with their processing partner First Data Corp.

Best Practices

Merchant Intelligence Report emphasizes to merchants not to rush into signing contracts that don’t have the details spelled out. Transparency is key, and all the fees and terms need to be identified to ensure a long, lasting partnership between merchants and processors. MIR helps merchants determine the best processor for their needs by identifying the terms and capabilities that meet merchants' growing needs.