If you’ve ever wondered why there are so many pricing models in the payment processing industry, you’re not alone. Questions like “Which one is better?” or “What does it mean for my business?” are common, and I’ve been answering them for over a decade.
My approach is simple: educate, analyze, and empower. I believe that understanding the pricing structure behind your payment processing is essential to making informed decisions for your business.
Industry Standard, Transparent, Negotiable
Interchange Plus has become the benchmark for pricing merchant accounts. Interchange is the term we use to describe the "cost" associated with processing the card. This single fee represents about 70% of the total cost of the transaction. The funds you pay for these fees are funnelled back to the bank that issued the credit card. Ever wonder why banks love issuing credit cards?
What's the difference between Interchange Plus, Cost Plus, Discount Rate, Flat-Fee?
Square pioneered flat-rate pricing, which is the best solution for occasional users who do not want to incur the added costs of monthly account fees when they are not selling. When a merchant's monthly processing volume is above $3000 per month, then an Interchange Plus pricing model is appealing since the money saved from the lower fees will offset the additional monthly cost to operate the account.
