Of all the billing platforms in the credit card processing industry, flat-rate pricing is the easiest to understand. When merchants use true flat-rate pricing, they are charged one rate, regardless of transaction size or type, for all of their credit, debit, corporate and rewards card transaction volume.
Some merchant service providers masquerade pricing options as flat-rate, but merchants are often surprised to find a long list of other incomprehensible fees on their merchant statement. In true flat-rate pricing, the merchant is only charged a percentage of their processed volume—perhaps also a small fee per transaction or a monthly fee, but nothing more.
Whether or not flat-rate pricing is most beneficial to you and your business is dependent upon exactly what that flat rate does and does not cover. For example: Is this rate lower, or at least equal to, the individual fees, as well as the processor's profit, it is designed to encompass? A breakdown and analysis of these costs is required to effectively determine if flat-rate pricing would be the most efficient platform structure for you or not.
To find out what billing platform would make the most sense for your business, it’s best to contact a handful of merchant service providers and ask them to assess your most recent credit card processing statement.
By reviewing your credit card processing statement, a merchant service provider can learn more about your business and the number of card-present transactions within a given month. This will help determine if flat-rate pricing fits the bill, or if being priced on another platform, such as tiered pricing or interchange plus pricing—find out what interchange is here—would be more cost-effective for you.
Plus, a trusted merchant service provider may also be able to recognize any hidden fees on your credit card processing statement, which could be costing you more money than necessary.
Think you might be overpaying for your merchant services? In order to discover how much you're really paying, calculate your effective rate.