The Business Buzz

“There’s no such thing as free lunch.” And there certainly isn’t a free way to collect debit and credit card payments. That said, you might think one payment solution is as good as the next one. However, nothing could be further from the truth.

Do you know the difference between flat rate, interchange plus, and tiered pricing? Do you know what type of pricing model your payment processing company uses? Do you know how much of a difference it would make if that pricing model were changed?

Flat-rate pricing is fine if you’re just starting out. But if your sales volume is higher, flat rate pricing could be costing you a lot more than you might think.

Did you know that the true cost of every card payment is different? Visa, Mastercard, American Express, and Discover all have different fees. There are different merchant category codes (MCCs) assigned to businesses based on what the business sells. These MCC codes also impact pricing. Debit transactions have different pricing, and PIN transactions have different pricing than something purchased through an online gateway. Business cards and cards with rewards have different transaction costs than consumer cards that don’t offer points.

With all this nuance in credit card processing fees, you’ll see that flat-rate pricing is a gross oversimplification that could be costing your business hundreds, thousands, or tens of thousands of dollars per year. If flat-rate pricing were applied to large corporations like Amazon, they’d lose millions of dollars per year.

Check out how credit card pricing impacts your profits by perusing some of the articles below.