Reduce operational costs
Improves profit margins
Encourages alternative payment methods
A flat-rate credit card processing program is a payment processing model where businesses pay a fixed percentage per transaction, regardless of the card type or issuing bank. Unlike tiered or interchange-plus pricing, which can vary based on card details, flat-rate pricing offers simplicity and predictability.
For example, a payment processor might charge a business 2.9% + $0.30 per transaction, covering all associated fees without fluctuation. This model is often preferred by small businesses because it eliminates the complexity of calculating different rates. However, while convenient, flat-rate processing can sometimes result in higher costs compared to interchange-plus models, especially for businesses with large transaction volumes.
Flat Rate: Pros & Cons
Every credit card processing program has its own advantages and drawbacks, making it essential for businesses to choose the right model based on their specific needs. Understanding these trade-offs allows businesses to make informed decisions that balance cost efficiency, customer experience, and compliance with industry regulations.
Pros
Simple and predictable pricing.
Often includes all card types in one rate
No complicated interchange calculations
Often includes all card types in one rate
Cons
Higher per-transaction cost than other models
Less transparency in fee distribution
Not ideal for high-volume business
