How Flat Rate Merchant Credit Card Processing Works?
If you have been searching for a payment processor for the last few days, then you must have surely come across the term “flat rate”. What does it actually mean? Well, there can be two references to it – a flat rate percentage or flat rate fee. They may sound almost the same but they are actually not. Both of them hold different meanings. Flat rate merchant credit card processing has been in use for a long time now. A lot of merchants opt for it. Do you know what it is? If not then read this blog to know how to become a merchant account provider.
How Does a Flat Rate Fee Tend to Work?
When a merchant opts for a flat rate credit card processing percentage or fee, they will need to pay a fixed amount of money whenever a customer swipes their card to make a payment. The flat rate percentage can be anywhere between 2%-4.5% varying on multiple factors. Flat rate processing fee is more beneficial when the merchant has a free card reader. They also opt for it because they can keep a safe and simpler track of the overall expenses that have been incurred on the credit card payments.
Though a flat rate processing fee seems to be a very easy to understand process, it is not actually the cheapest one all the time. You must know that a flat rate processing fee is composite which means that merchants don’t pay a single pay figure. On the other hand, there are 3 different kinds of fees involved in it – interchange fee, network fee & markup fee. That means, whenever a customer is using their card, the merchant has to bear all the fees.
What are the benefits of a flat rate fee?
The main reason why merchants opt for flat rate credit card processing fee is because of its high predictability. You can always choose to calculate the processing fee without any hassles because it is almost the same. The merchant has to multiply the gross sales by the overall payment processor’s fee. That is why a merchant can have the flexibility to plan a better financial budget and realize the overall expenses that are incurred every month. Also, the flat rate processing fee is beneficial for small to medium sized businesses since they can eliminate the concurrent fees involved. They can save a lot of money by avoiding paying account fees, per-transaction fees, etc.
Flat rate credit card processing is getting popular as more startups and small businesses are opting for credit card payments. That is why you should learn how to become a merchant account provider and earn a lot of money by selling credit card services!
Final Words – flat rate credit card processing fee is a wonderful way to get over the high credit card processing charges and other fees. It enables a business to channel this money to other aspects of the business and expand their business in the right way.