How to Find the Best Credit Card Pricing Model for Your Business

If your business accepts credit cards, it’s important to choose the right credit card pricing model.

While there are many methods to process credit cards, not all of them will benefit your business.

Many merchant service providers overcharge for credit card processing, while others don’t disclose their rates at all. Finding a provider that tells you exactly how much you are paying to process credit cards will help you save money. You shouldn’t encounter any hidden fees or surprise charges.

Whether you currently process credit cards, or are trying to figure out how to start accepting credit card payments, you should find a processor with simple rates and clear fees.

Compare Credit Card Processing Rates

Credit card processors charge clients using one of three different pricing models.

Flat Rate Pricing

Flat rate pricing is ideal for businesses that want a no-nonsense pricing structure.

This pricing model eliminates surprise charges. Your merchant services provider will give you a straightforward statement that makes it easy to see exactly how much you paid in credit card processing fees each month.

With flat rate pricing, businesses can pay the same low monthly rate for each transaction, regardless of credit card type, without any additional transaction fees.

Interchange-Plus Pricing

Interchange-plus is a transparent pricing model that provides 100% clarity on all payment processing costs.

There are over 350 different types of credit cards, each with its own unique interchange rate. With interchange-plus pricing, processing rates assigned by card-issuing banks are passed directly to your business. You can achieve the lowest fees for each transaction on corporate, commercial, business, government, and purchasing cards.

You may find this credit card pricing model difficult to understand, as it takes time to learn the different rates for each type of credit card.

But the flexible processing, and the potential to achieve the lowest credit card processing rates based on the types of card you accept, may prove highly beneficial for your business.

Tiered Pricing

Tiered pricing was originally created as a simple way for merchants to process credit cards. Most credit card processors use this pricing model, but it often proves the most expensive option.

Tiered pricing takes interchange rates set by the card issuing bank and places them into tiers. Each tier comes with its own set of transactions fees.

Transactions are typically billed under three general categories:

  • Qualified (Non-rewards credit cards and debit cards)
  • Mid-Qualified (Manually-entered consumer and debit cards)
  • Non-Qualified (Commercial, international, and rewards cards)

However, tiered pricing doesn’t provide any details or flexibility regarding credit card processing fees. For example, a processor may bill a credit union debit card (usually a low interchange rate) using a rewards card rate (one of the most expensive).

Since no set guidelines exist to determine which category a card falls into, mismatching often occurs, and businesses can get overcharged for credit card processing fees.

credit card pricing models

Protect Your Payments

Not every credit card processing pricing model is created equal. Compare credit card processing rates to safeguard your finances, and use a merchant services provider that offers simple, transparent pricing. By finding the right credit card pricing model, you can ensure the lowest processing fees for your business.

Use this guide to compare credit card processing rates to determine the best credit card pricing model for your business.