Merchant Account

Flat Fixed Rate Pricing- Is This The Pricing Solution You Are Looking For?

[I:http://collegestudentcreditcard.org/wp-content/uploads/2011/01/LisaKaye0.jpg] When your business opens a new merchant account or switches providers for lower fees, you are faced with a decision as to which merchant processor is going to provide the best rate. There are four general types of pricing plans that are industry standard. The most transparent pricing structure is Interchange Pass Through. Interchange Pass Through pricing are the wholesale rates passed directly from the payment cards along with a transaction fee and a discount fee based upon the amount of volume your business processes. However, the latest’s trend in merchant account pricing that should be considered is the flat rate merchant processing account.

With a flat rate pricing structure your business will still pay the wholesale charges based upon the type of credit card used and the type of transaction mandated by the Payment Card Industry. The benefit of a flat fixed pricing structure is your fees will not increase as the volume that your business processes increases. Of course not being on a fixed flat rate pricing structure will lead to higher costs, but on a flat rate pricing structure your business will pay the wholesale payment card rates charged to the processor, a per transaction fee, and a fixed flat rate no matter how much your business processed that month. Your merchant processing fees for the merchant provider will never increase.

The biggest difference between a flat rate pricing and other pricing structure is that there is simply no mark up on the interchange. This sounds quite strange as we know that ‘interchange fee’ is what the acquiring bank needs to pay the issuing bank.

Because the discount fee charged is dynamic your fees will increase as your processing volume increases. However, a flat rate usually averages under .20 basis points and remains constant no matter how much your business processes. Fixed flat rate processing is the most affordable solution for accepting credit cards. Your business will see all of the fees that you pay per month very clearly making it impossible to pad and hide surcharges and fees.

Due to the differences, this is the most affordable solution to credit cards. This shows you all of the fees that you are responsible for and how much you will be charged very clearly. It is gaining popularity with other merchants, but be aware not all credit card companies offers Interchange Pass Through pricing coupled with fixed flat rate processing.

Read all of your paperwork when carrying out a comparison of each company as to what they offer before you make a final decision in order to ensure that you have the best pricing possible for your business.

Before you sign up for a merchant services, please allow merchant service sales to provide you with a free merchant services account analysis to ensure you are not being charged hidden fees and costly surcharges.

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