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Flat Rate Credit Card Processing: So you are a small business owner for the first time and you want your customers to accept credit and debit cards.
You’re bound to get much more sales, after all – and make more cash, right?
Well, generally speaking, this is true.
Credit card processing is however a mysterious and rather complex subject, and often a more expensive proposal than most business owners expect is to get an account with a payment processor.

Flat Rate Credit Card Processing

One of the more confusing aspects of credit card processing is to see exactly how much your credit or debit card transaction processor pays.
Reading your monthly transaction statement can be frustrating and your cost may often vary widely (and apparently randomly) from transaction to transaction.
If you just paid the same amount for each sale, wouldn’t it be nice?
It would be easier for you to predict how much you are paying for credit card processing every month. Your costs would be predicable.

Well, this type of stable and reliable prices can be enjoyed.
The flat rate price model is based on the idea that each transaction will receive a fixed rate so that you can anticipate your cost of processing every month.
Nevertheless, we should emphasize that any processor is still offering a true flat rate pricing model.
Even the small business-friendly square has at least three different rates, depending mainly on whether you take a card personally or through the website or enter card information manually.

Another important factor with flat pricing is that it involves an important deal – it is often considerably more costly per transaction than other price models.
This disadvantage is compensated by the absence of a monthly account fee or any other fees that are billed to your bill by most providers using a flat rate price model.
This is why flat rates for very small or seasonal businesses are often the lowest-cost overall choice.

In this article, we analyze how flat pricing works and how you can save money on costs.
We will also show you how it is compared to exchange plus pricing, which is another popular price model which is actually cheaper for some companies.
We show you finally how you analyze your processing costs in order to determine the price model that will make your business more affordable.

What Is It?

In this instance, you have realized that processing credit cards is not free.
While this is not understandable to many consumers, every business owner is acutely aware that the costs of processing transactions will cover a certain percentage of any credit card transaction.
Unfortunately, this percentage is not quite certain, so the subject can be so confusing to process the credit card.

Here’s how it works, in short:
Your credit card manager pays the credit card issuer’s percentage fees (called, unsurprisingly, the issuing bank).
These fees are known as exchange fees, and vary broadly depending on various factors, including the type of card used, the type of transaction, the nature of the item purchased, etc.
Literally, there are hundreds of interchange charges, one of which can apply to a particular transaction.

There is also a network fee paid to the card sponsoring association (i.e., Visa, Mastercard, etc.).
Typically network charges amount to around 0.05 percent, so that your company won’t have a significant costs.
Finally, the markup is the fee your processor pays after the other charges are paid.
Even if you don’t know how much it really is, it will always be an indication of what kind of processing rate plan your processor is using.

Flat rate pricing aims at eliminating some of the confusion around interchange fees and providing you with an easy and predictable set of rates you pay every time.
The main benefit of flat-rate processing is that you always know exactly how much a transaction is going to cost you in advance.
The majority of flat rates comprise both a percentage and a fixed transaction fee.

Use Square as an example of how flat-rate pricing actually works.
Three primary processing rates are offered:

  • 2.75% for all transactions with card-present
  • 2.90% + $0.30 for all ecommerce transactions (i.e., card-not-present)
  • For all manually entered (or card-not-present) transactions, 3.50 per cent + $0.15.

Smart Square SSM

What is your business with this type of pricing?
In a word: foresight.
You will always pay 2.75 per cent for every transaction if you are only a traditional brick-and-mortar reseller, unless the customer card works not and you have to manually enter the information.
Similarly, every time you proceed with a payment, every time you ecommerce alone, you will always pay 2,90% + $0.30 per transaction.
Companies will practically always pay 3.5% + $0.15 per transaction for mail order and phone order services.
Omnichannel companies are going to have a bit more variability, but it won’t be too hard to figure out how much you are paying with only three rates available.

Payments service providers (PSPs) such as Square, PayPal and Stripe have a flat rate plan to choose which will not offer you an accurate merchant account.
You will instead be aggregated into each other company that uses the services of the company.
The principal advantage of registering with one of these PSPs for small business operators consists in the fact that, in most cases, you will not pay a monthly account fee or any recurring fees.
This can save you a lot of money, particularly if you are a seasonal business owner or only take the credit or debit card transaction from time to time.

The main disadvantage of flat rates is just that processing rates are high – often higher than any other kind of rate plan.
As we have already mentioned, a certain transaction could involve hundreds of possible exchange rates.
Let us assume, however, that the average exchange rate for card-in-transaction transactions is approximately 1.4 percent and for card-in-present transactions 1,9 percent.

Compared to the above quoted Square rates, it’s clear that for every transaction you pay a much higher rate.
Why is this? Why is this?
Well, your processor won’t lose any transaction and will set flat rates high enough to cover even the most expensive currencies.
For this reason, the processing rate of the best-known PSPs is nearly exactly the same.

When flat rates really begin to cost you money, debit card transactions are involved.
Given that such payments come directly from the client’s bank account and do not have a bank that covers the entire cost of the transaction, debit transaction interchange fees are much lower than they are for credit cards – typically less than 1.0 percent.
Unfortunately, a plan for flat-rate pricings does not include this. So, whether a customer uses a debit card or a credit card, you will pay the same full price.

Interchange-Plus VS Flat-Rate Pricing

In the meantime, it should be obvious that flat-rate pricing are simpler and more predictable.
You may want to think about alternative ways if you do not like to pay far more than the basic exchange fee (particularly for debit card transactions).

Interchange plus pricing is a more popular processing rate plan.
Under this price, the basic interchange rate plus an extra markup is charged by your processor.
A typical exchange-plus quote, for example, could be something like 0,3% + 0,15 $ per transaction.
In this case, fees will be passed on at an interchange price and a markup of 0.30 percent + $0.15 will be clearly revealed per transaction.

If we again assume an average interchange fee of 1.4% for card-present transactions, this works out to an effective average rate of 1.70% + $0.15 per transaction. In most (but not all) cases, this will be much less expensive than what Square or any other PSP charges for the same type of transaction. Remember, however, that interchange rates vary quite a bit, so if your particular transaction has a higher interchange fee, there might not be that much of a difference between the two processing rate plans.

You also need to be aware that certain providers are giving you an interchange rate plus quote that only mentions the markup.
Do not be confused to believe that you have a good deal – you will always have to pay the fees for the exchange.
Indeed, for almost all transactions interchange charges constitute the bulk of your processing costs.

Processing rates are, of course, just one part of your total cost.
Providers that offer interchange plus pricing will be able to subscribe to a traditional, complete commercial account.
This is much more stable and safe than what you get with a PSP, but at a surcharge.

Expect to pay a monthly account fee at an absolute minimum. There are also a host of other fees you might have to pay, increasing your costs even more. For this reason, a with interchange-plus pricing works best for year-round businesses that accept credit and debit cards on a daily basis, and process at least a certain amount (typically around $5000 per month) in credit and debit card transactions.

When Does Flat-Rate Pricing Work Well?

To answer this question, flat rate pricing is the best option for small or newly established enterprises that do not have a high monthly processing volume and do not want additional account charges to burden themselves.
If you are just starting out or if your business is a side show that will not grow significantly over time, flat-rate pricing makes it easy, without commitment and cost of a , to accept credit and debit cards.

Yes, for credit card processing, you’ll pay more on a per transaction basis.
You do not, however, have to pay all additional costs or long-term contracts which typically come with a genuine trading account.
Overall, flat pricing can save you money by eliminating most of these extra fees, if not all.
The lack of a long-term contract makes it easy and painless to switch to a full-service trading account.

Can you get something better?

From the above discussion it should be evident that flat prices do not apply to all.
Yes, it’s easy to understand, and your months processing statement will not contain a long list of confusing additional fees.
However, for each transaction you will continue to pay more and this reality will catch up with you at some point.
When your business is big enough, you have to switch to an interchange plus pricing .
We are always a little disappointed at the fact that companies still use Square, when obviously they have grown to the point that they lose money by not turning into an interchange-plus plan.

Where is the point of reference, after which you should move towards exchange plus prices? What does it mean?
There’s no simple reply, unfortunately.
We have seen sellers saying they have to process an interchange plus of at least $10,000 a month, and other providers put that low to $1500 a month.
The truth is it’s not difficult to rule quickly.
You will have to analyze your actual cost of processing under a flat rate and compare it to your cost estimate under an interchange plus price scheme for the same transactions.

Remember that, once you sign up for a complete service merchant account under another provider, there is nothing to keep your Square account back up.
In case of technical problems with their primary account processing hardware, many companies retain their Square Card readers.

Flat Rate Pricing is An Illusion

Because of the basics of processing credit cards, a processor has virtually no competitive flat rate and remains profitable.

A company pays three separate charges each time a credit card transaction is completed.
It pays an interchange fee to the bank that issued the customer‘s card.
It pays the card brand fee (Visa, MasterCard, or Discover) with a logo called an appraisal, which appears on the customer card.
And a credit card manufacturer is charged as a markup.

Flat Rate Pricing is An Illusion

Interchange fees and appraisals are fixed costs that remain identical, independently of the company which uses the credit card processing.
Evaluations of different types of transactions continue to be fairly consistent but the interchange rate varies across about 280 different categories.

The interchange rate for each credit card transaction is between 0.05% and 3.17%, depending on several variables such as type of card, card brand, method of processing, settlement time and more.

An interchange and assessment processor offering customer flat-rate credit card processing still has to be paid for behind the scenes without the customer being aware.

For example, Square charges its customers a flat rate of 2.75% for swiped and 3.50% for keyed transactions that only cost it about 1.40% and 1.95% on average. The difference between interchange and its flat rate is Square’s markup.

Companies that offer this type of pricing are not actually “real” processors. Instead, they are aggregators that use one merchant account to process transactions for thousands of businesses.

As I’ll explain in greater detail below, this type of flat rate pricing is inherently uncompetitive because an aggregator has to ensure its flat rate is high enough to cover all possible base costs associated with interchange and assessments as well as its markup, and base costs vary greatly.

Truly Competitive Pricing Vs. Flat Rate Pricing

The processing of flat rates credit cards is not intended to compete; it should be easy to understand.
Based on the feeling that businesses are better at handling fees, they often decipher credit card processing statements toward flat-rate pricing.

Truly Competitive Pricing Vs. Flat Rate Pricing

A price model called interchange plus pricing enables companies to have the best in both countries—a flat, fixed supplement from the manufacturer and competitive pricing.

Interchange Plus Pricing

We explained in detail before interchange plus pricing.
Our guidance on how interchange plus is less competitive and transparent than others, even flat rates, is covered by our credit card processing guide.
In brief, interchange plus pricing differentiates exchange costs and evaluations from processor marking.

Arguments for Flat Rate Pricing

Flat-rate pricing has two redemptive qualities, it is simple and is occasionally offered for businesses with a lot of transactions.
You will know costs that do not change with flat rate pricing, making it easier to calculate what you pay or expect to pay depending on your ticket size and volume.

Known Costs

The charges with fixed pricing are relatively easy to predict.
To calculate fees, just multiply the gross sales by the rate of the processor.

Simplicity seems like a small convenience given that flat pricing usually costs 20 percent more than other types of pricing, but some companies are nonetheless prepared to pay a flat rate.
Paid more convenience for your company may make sense, just keep in mind that you are paying more in most cases.
Don’t confuse simple and cheap.

Small Tickets

Some manufacturers offer flat rates without a transaction charge.
For companies with very low average fare, it’s an ideal pricing model.

For example, for 3 dollars, 2.75 percent are only $0.0825, which is less than the interchange fee that the processor pays.
Aggregators who are not charging a transaction charge are thus actually losing money by handling small average tickets for companies.
Because of the low average transaction total, Square lost $30 million for Starbucks processing.

Don’t simply be fooled.
Instead, side-step fancy marketing ploys such as flat rates for truly competitive rates and fees, such as those offered here at the marketplace of CardFellow.

Don’t simply be fooled.
Instead, side-step fancy marketing ploys such as flat rates for truly competitive rates and fees, such as those offered here at the marketplace of CardFellow.
CardFellow only enables the processors to use real pass pricing so our customers can easily compare and choose a processing solution that is exceptionally competitive.

What is a flat rate cash back card?

The most simple premises you can find with a flat-rate cash back card – the same sum of cash back on every buy you make.
So it is easy to earn rewards for a wide range of purchases without tracking expenditure categories or bonus rewards.

Best Flat-Rate Credit Card Processor


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Every Clover system comes with peace of mind


Once you’re approved, your system will arrive in one business day.


Return for a full refund within 60 days. You pay only for return shipping.


Pay the same low rates for all cards, including AMEX and rewards cards.

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We’re taking smart terminal to a new level, making it easy to offer rewards, capture information, ensure order accuracy, and accept just about every mobile payment type.





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A powerful POS for both sides of the counter


  • Merchant One claims to have a 98% approval rate and says its willing to work with all companies.
  • The credit card processor charges $6.95 a month plus 0.29% to 1.55% for in-person transactions and 0.29% to 1.99% for keyed-in transactions.
  • You will also pay 2.7% and 10 cents for in-person purchases and 3.5% plus 10 cents for virtual or card-not-present purchases.
  • You pay a transaction fee of 2.3% plus 10 cents for in-person purchases and 3.5% plus 10 cents for online and keyed-in purchases.
  • It costs 3.5% and 10 cents per transaction.
  • Clover charges a 1% per transaction fee for this service.
  • With the first plan, which is for businesses the process less than $80,000 annually, you pay 2.9% per transaction and then 8 cents for swiped cards or 15 cents per transaction for cards whose number you key in.
  • Square charges 2.6% plus 10 cents for in-person payments and 3.5% plus 15 cents for card-not-present transactions.
  • The cost for purchases through your Square online store, Square online checkout, e-commerce API, or via an invoice is 2.9% and an additional 30 cents.
  • Another perk: You get an instant discount of 2.75% when you use this card to shop with other Square sellers. (


  • Created by Visa, MasterCard, American Express, Discover and JCB in 2006, this standard requires that businesses meet certain criteria to ensure their transactions are as secure as they can be.
  • Accept VISA, MasterCard, American Express, Discover and STAR credit and debit cards with a merchant account from, a Paysafe (formerly iPayment) company.
  • Here’s what it costs to accept credit cards using Dharma Merchant Services: In-person processing with Visa, Mastercard and Discover cards, accepted using a card reader: 15% + $0.07 above interchange In-person processing with American Express cards, accepted using a card reader: 25% + $0.07 above interchange Online and card-not-present processing with Visa, Mastercard and Discover cards: 2% + $0.10 above interchange Online and card-not-present processing with American Express cards: 3% + $0.10 above interchange Merchants that process more than $100,000 in sales or 5,000 transactions per month qualify for even lower pricing, at 1% + $0.05 above interchange for both in-person and online transactions.
  • Processing Rates No matter what brand of card your customer presents – American Express, Discover, Mastercard or Visa – you pay the same rate.
  • Your financial standing alone shouldn’t hurt your chances of buying property, getting a business loan and accepting credit card payments.
  • Rates could start as low as 1.29%, plus 15 cents per transaction, and apply to all major credit cards.
  • The Basic plan, which is for businesses that process $25,000 or less each month costs $49 plus 15 cents per transaction.
  • Despite being one of the oldest payment processors on the web, PayPal has remained relevant, updating their systems, reporting and security protocols each year,” Ciccarelli told Business News Daily.
  • We’ve spent hundreds of hours researching the credit card processing industry; we looked for credit card processors that offer transparent pricing, with reasonable rates and few credit card processing fees, reliable customer support, and no long-term contracts.
  • Credit card processing companies rely on fees to make their money, so there’s no way to completely eliminate credit card processing fees.
  • Credit card processing companies rely on fees to make their money, so there’s no way to completely eliminate credit card processing fees.
  • The major credit card networks have rules about minimum transaction amounts, so verify that your policy complies with their rules.
  • There’s also no rate difference based on card type.
  • Here are some of the factors that determine the per-transaction cost: The type of card your customer uses (debit, credit, rewards, premium rewards, corporate) How you accept the card (in-person using a card reader, manually keyed in, online) The pricing structure your processor uses (flat rate, interchange plus, tiered) What Fees Come With Credit Card Processing?
  • Payment Depot can be pricey, especially if you don’t have a high volume of transactions.
  • It has card readers for mobile credit card processing, payment gateways and shopping carts for e-commerce processing, and POS systems and countertop terminals for credit card processing at brick-and-mortar stores.
  • The company claims to have the lowest rates for card-present transactions but doesn’t post them online.
  • According to the company, if you apply online, ProMerchant can notify you of its decision sometimes the same day. (Otherwise, the average time it takes to hear back on your application is two business days.) It also offers overnight delivery of free terminals and next-day access to online processing tools.
  • Payments are typically deposited into your account in one or two business days.
  • Payouts FIS deposits the processed money from your transactions into your business bank account within one to three business days.
  • The credit card processor offers two pricing models: There’s the more popular interchange-plus rate or a tiered pricing model.
  • The credit card processor offers two pricing models: There’s the more popular interchange-plus rate or a tiered pricing model.
  • There is no monthly minimum, but if your monthly processing volume is less than $2,500, Payment Depot may refer you to Square PayPal , as they may be more cost-effective processing solutions for your business.
  • If you do need those extra services
  • Here’s what it costs to accept credit cards using Dharma Merchant Services: In-person processing with Visa, Mastercard and Discover cards, accepted using a card reader: 15% + $0.07 above interchange In-person processing with American Express cards, accepted using a card reader: 25% + $0.07 above interchange Online and card-not-present processing with Visa, Mastercard and Discover cards: 2% + $0.10 above interchange Online and card-not-present processing with American Express cards: 3% + $0.10 above interchange Merchants that process more than $100,000 in sales or 5,000 transactions per month qualify for even lower pricing, at 1% + $0.05 above interchange for both in-person and online transactions.
  • , the monthly cost can escalate quickly.
  • We selected Helcim because in addition to being one of the most transparent credit card companies in the industry, it provides interchange-plus pricing to all of its merchants and posts its complete rates and fees on its website so you know exactly what you’ll pay. (
  • Additionally, Ben points out that, while the subscription flat-rate model may be a cost-effective option for new and growing businesses, you need to understand that many subscription pricing processors set a limit on the number of transactions you can process at each membership level. (
  • We Recommend Helcim 🏆 Helcim is one of our top picks for payment processing! (
  • Of all the merchant service providers on our list that offer interchange-plus pricing, Dharma also has the lowest monthly fee. (


Flat Rate Credit Card Processing