Two processors can quote very different numbers for the same transactions because they package fees differently. Here's how the three common models compare.
Flat-rate pricing
You pay one percentage plus a fixed fee per transaction, for example 2.9% + 30¢ online. It's easy to understand and budget for, and there's usually no monthly fee.
- Best for: new businesses, low volume, and anyone who values simplicity.
- Watch out for: you pay the same rate on low-cost debit cards as on premium rewards cards, so you overpay as volume grows.
Interchange-plus pricing
You pay the actual interchange and network fees, plus a fixed processor markup (for example interchange + 0.40% + 8¢). It's the most transparent model.
- Best for: businesses processing more than a few thousand dollars a month.
- Watch out for: monthly statements are more detailed, and your total rate changes with your card mix.
Tiered pricing
Transactions are grouped into qualified, mid-qualified and non-qualified tiers, each with its own rate. The low "qualified" rate is often advertised, but many transactions fall into the more expensive tiers.
- Watch out for: it's hard to compare with other offers. Ask for interchange-plus instead.
How to compare offers
Calculate your effective rate: total fees divided by total sales. Use our savings calculator to compare your current rate with a new quote, or request free quotes.