Credit card processors will often give “flat rates.” For example, it is common for customers to come to us, saying that a company quoted them at a rate of 1.4% or 1.3%, asking if we can beat it. This is a red flag and a good indication that the salesmen isn’t giving the full picture.
Interchange rates, or the rate charged by Visa/MC, change based on the type of card used, so how could you pay a flat rate of 1.3%?
The answer is that you can’t. When companies offer 1.3%, they’re really just absorbing the interchange rate into that 1.3% and keeping whatever is left over. If the interchange rate turns out to be greater than 1.3% then they’ll charge you a surcharge for being Mid- or Non-Qualified. The definitions of Mid-Qualified versus Non-Qualifies are vague, as they’re meant to be, with different rates corresponding to each category. Ultimately, they are just another way of making your “flat” rate not-so-flat.
Think of it this way. Any time a customer uses a credit card, which have interchange rates around 2%, you will be charged a surcharge.
Bottom line: there are no such things as flat rates. Looking at the bill or quote carefully should uncover the surcharges that lurk beneath the surface.
At 99 Merchant Account, we strive to provide transparent billing and ease of mind knowing that you’re not paying hidden fees. All you pay are the wholesale rates set by Visa/MC and a membership fee of $99 per month plus 10¢ per transaction.