What is the Flat Rate merchant pricing structure?
Flat Rate pricing is a transparent and predictable billing model that may provide simplicity for some business types. As a merchant, this means you pay a fixed percentage fee for every credit card transaction, regardless of the card type (e.g., Visa, Mastercard, Amex) or the underlying interchange rate.
How does it work for you?
Whether your customer pays with a basic debit card or a premium rewards credit card, you’ll be charged the same flat rate: usually around 3.5% per transaction. This makes it easier for you to estimate your processing costs and manage your budget.
With a flat rate structure your pricing won’t be impacted negatively or positively. However, keep in mind that:
- in-person (card-present) transactions usually have a lower interchange rate
- online or manually entered (card-not-present) transactions typically have a slightly higher interchange rate.
What are the benefits of Flat Rate pricing?
- Simplicity: no need to understand complex interchange tables.
- Predictability: you always know what you’ll be charged.
- Convenience: ideal if you have low transaction volume or consistent sales patterns, or if you’re on Cash Discount.
What should you watch out for?
While Flat Rate pricing is convenient, it may not be the most cost-effective option if:
• you process a high volume of transactions
• you have large average ticket sizes
• you frequently accept cards with lower interchange fees
• you aren’t on Cash Discount
In such cases, you might benefit more from Interchange Plus pricing or Tiered Pricing. For more information, check out our dedicated FAQs below.