What is Flat Fee Processing?
In this article, we have compiled information about flat fee processing in merchant services. Continue to read if you have ever wondered what flat fee processing is.
When looking for a payment processor, you may have constantly come across providers that offer a 'flat rate'. But what exactly is a flat rate? A flat rate can be anything, it can be a percentage charge with regards to something or it can be a pre-decided fee. A flat-rate fee and a flat rate percentage may sound like they are the same thing but they are not. Here we will provide you with information about flat rate percentage and flat-rate fee, their meaning and how your business is affected by them.
Flat rate Percentage
A permanent percentage that is charged per transaction can be called a flat rate percentage. It may sound like a simple charge but it costs quite a bit when it piles on overtime. Interchange is the direct cost of processing and with a flat rate percentage you end up paying much more than that. The extra fee is adding to your merchant services in USA provider's profits. A flat rate percentage can work for businesses that do not accept a lot of credit card payments or have a very low volume of transactions but it is a bad payment structure for businesses who wish to grow and scale-up. With this payment structure, your payment processor provider makes a lot of money and the more you earn the more you shall be required to pay. This payment structure makes no sense for businesses that have the possibility of growth.
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Flat Rate Fee
When you pay a fixed amount to your merchant service provider, mostly monthly, it is called a flat-rate fee. Sometimes a merchant service provider may call it a monthly membership fee or a monthly maintenance fee instead of a flat rate fee but they are all the same. A flat-rate fee is the most convenient form of cost. It was formulated to cover all prospects of processing, unlike the interchange rates. With a flat-rate fee, you are saved from having to pay any extra fees that may occur or even any surprise expenses that may be asked. You get more time and energy to focus on your business and you know what to expect in your bill every month.
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