When it comes to credit card processing, one of the most important decisions you’ll make is choosing the right pricing model. Two of the most common options are flat rate pricing and interchange-plus pricing. While both have their place, understanding how they work—and what they cost—can make a big difference for your bottom line.
At Beacon Payments, we believe in transparency and helping merchants make smart, informed decisions. In this post, we’ll break down flat rate vs. interchange-plus pricing, and help you decide which model is best for your business.
What Is Flat Rate Pricing?
Flat rate pricing means you pay the same fixed percentage (plus a small transaction fee) for every credit or debit card sale—regardless of the card type, brand, or how the payment is made.
Example:
Let’s say your provider charges a flat rate of 2.75%.
A $100 transaction = $2.75 fee, no matter the card or method.
✅ Pros of Flat Rate Pricing:
- Simple & predictable
- Easy to understand and explain
- Good for very small businesses or new merchants
❌ Cons of Flat Rate Pricing:
- Often more expensive than necessary
- Doesn’t reflect the true cost of different card types
- You may be overpaying, especially for debit or low-cost cards
What Is Interchange-Plus Pricing?
Interchange-plus pricing separates the true cost of processing (interchange fees + card brand assessments) from your processor’s markup. You’ll see the actual cost for each transaction, plus a clearly stated fee.
Example:
Visa Debit Interchange: 0.80% + $0.15
Processor Markup: 0.25% + $0.10
Total: 1.05% + $0.25
✅ Pros of Interchange-Plus Pricing:
- Transparent – You see exactly what you’re paying
- Lower cost for many businesses
- Scales better as your business grows
❌ Cons of Interchange-Plus Pricing:
- Can be more complex to read on your statement
- Rates vary by transaction, so monthly fees fluctuate
Which Pricing Model Is Right for You?
Here’s a quick breakdown based on business type and volume:
| Business Type | Best Option | Why |
|---|---|---|
| New or very small business | Flat Rate | Easy to understand and manage |
| Medium to large business | Interchange-Plus | More cost-effective over time |
| High-volume retailers | Interchange-Plus | Lower fees on debit & regular cards |
| Service-based businesses | Depends | Evaluate based on average ticket size and card types |
Final Thoughts
While flat rate pricing is easy to understand, it often comes at a cost. On the other hand, interchange-plus pricing offers greater transparency and typically saves money as your business grows.
At Beacon Payments, we specialize in interchange-plus pricing because it’s honest, customizable, and built around your business—not ours. If you’re not sure what you’re currently paying or want help comparing options, we’ll review your statement and break it down—no pressure, no gimmicks.
Want to know which pricing model is best for you?
Contact Beacon Payments today for a free consultation and statement analysis.