What Is Flat-Rate Pricing in Payment Processing?
If you’ve ever looked into payment processing, chances are you’ve seen the term “flat-rate pricing.” But what does it actually mean—and is it the right choice for your business?
Flat-rate pricing is exactly what it sounds like: you pay the same rate on every transaction, no matter what type of card your customer uses. For example, a processor might charge 2.9% + 30¢ per transaction across the board. Whether it’s a debit card, rewards credit card, or business card, the rate doesn’t change.
Why Businesses Like Flat-Rate Pricing
- Simplicity: No complicated statements or variable rates. You always know what you’re paying.
- Easy to Budget: Flat fees make it straightforward to predict costs month-to-month.
- Good for Low-Volume Sellers: If you only process a handful of transactions, the convenience can outweigh the higher costs.
The Catch
While flat-rate pricing is simple, it’s not always the most cost-effective. Interchange fees (the fees set by card networks) vary by card type, and with flat-rate, you’re often paying more than the actual cost for certain transactions. As your sales volume grows, those extra pennies per swipe add up.
The Bottom Line
Flat-rate pricing is great if you value simplicity over savings or you’re just starting out. But as your business scales, it may be worth exploring other pricing models like interchange-plus, which can lower costs while still giving you transparency.
At Rate Tracker, we will make sure you have the best payment system for your business. Get started with a dedicated representative today.
