Some processors offer flat rate without a transaction fee. Paying more foe convenience may make sense for your business, just remember that in most cases you will be paying more. Simplicity seems like a small comfort considering flat rate pricing is typically 20% more expensive than other forms of pricing, but nonetheless, some businesses are willing to pay to have a flat rate. Simply multiply gross sales by the processor’s rate to calculate charges. It’s relatively easy to forecast what charges will be with fixed-rate pricing. The difference between interchange and its flat rate is Square’s markup. The interchange rate assigned to an individual credit card transaction varies from 0.05% to 3.17% depending on several variables such as card type, card brand, processing method, settlement time, and more.Ī processor that offers its clients flat rate credit card processing still has to pay interchange and assessments it just does so behind the scenes without its clients knowing.įor example, Square charges its customers a flat rate of 2.75% for swiped and 3.50% for keyed transactions that only cost it about 1.40% and 1.95% on average. Assessments remain fairly consistent across different types of transactions, but interchange rates fluctuate over about 280 different categories. Interchange fees and assessments are fixed costs that remain the same regardless of which credit card processing company a business uses. And it pays a fee to a credit card processor as a markup. It pays a fee to the card brand (Visa, MasterCard, or Discover) whose logo is on the customer’s card, called an assessment. It pays a fee to the bank that issued the customer’s card, called an interchange fee. The fundamentals of credit card processing make it virtually impossible for a processor to charge a competitive flat rate and remain profitable.Įach time a business processes a credit card transaction it is actually paying three separate fees. Read about Subscription Flat Rate Pricing. Note that this is different than subscription flat rate pricing, where the costs of interchange are still visible to the business. Some flat rate models also include a per-transaction fee, often in the range of 20 – 30 cents per transaction.
The most prevalent version of flat rate processing is where a company charges its clients based on a fixed percentage of volume. Common flat rates are currently around 2.75% – 2.9% for swiped transactions. Flat Rate Pricingįlat rate is an increasingly popular pricing model for credit card processing. If you’re considering a flat rate credit card processing company, here’s what you need to know.
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