Myths of Merchant Services Pricing
Merchant Services Pricing Myths
Credit card processing fees can be confusing and hard to understand. Getting the best solution isn’t as easy as just accepting A, B or C. Look at what makes sense for your business based on your typical transaction. Here is some information to help you get the best decision.
Myths About Pricing Models
Myth: Flat fee pricing is the most straightforward model, making it the most transparent.
With a flat fee model, the merchant is charged a certain percentage of the transaction and a flat fee per transaction, no matter what type of card the customer uses. Although it sounds simple, the merchant doesn’t really know the exact markup the processor is getting on any one transaction. What the merchant does know, is how much they pay for each transaction no matter what the amount is or type of card that’s used.
Myth: Tiered pricing gives merchants the lowest rates.
Tiered pricing assigns a different rate to groups of transactions. Qualified transactions get charged the least, while mid-qualified and non-qualified transactions get charged higher rates. Processors set their own rules as to what is qualified, mid-qualified and non-qualified.
Myth: You’ll be able to understand your monthly statement.
Interchange pricing is a model that separates the wholesale credit card transaction fees and the processor’s fees on the bill. Your bill can appear very complicated, which makes it difficult to understand.
Choosing the Best Pricing Model
At Paragon Payment Solutions, we know that merchant pricing can be confusing. During the sales process, we do our best to educate our merchant customers on all the pricing options that are available to them. Once they have the facts, we leave it up to our customers to make an informed decision on what works best for their business. Contact us today to learn more about our merchant pricing options.
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