Credit Card Processing for Retail

Flat Rate vs True Merchant Service Payment Processing

Modern day options in technology and financial management for a business can be confusing and complicated. If you are considering flat rate vs true merchant service payment processing you have options.

TransAct Merchant Services always focuses on the true cost of services. Here are four (4) things to consider in the overall cost of processing.

  • Base fees
  • Equipment costs
  • Enhanced services
  • Fluctuations in customer credit card types

All of these (and others) can impact your monthly and overall costs of processing credit card, debit and gift card payments for your business.

Base fees

Base fees over the costs of having an account, statement fees or even online access before a single transaction is processed. Be sure to ask the question on how the account will be billed out. Businesses, especially start ups and seasonal businesses need to understand everything first. Often there is a monthly fee just to have an account. Then the flat rate percentage is added on based on sales. This can make it easy for planning, but can cost more in the long run. Know what each fee is and what they cover. Don’t pay more than you should.

Equipment costs

Rolling the cost of POS systems and equipment into a monthly payment through a payment plan or lease is often promoted as budget friendly. What is important is to look at the comparison of what the equipment – off the shelf – will cost if purchased up front. Buying it out-right as compared to a lease is a way to save money over the long term. Positive impacts on the financial side also include taxable expenses and depreciation. Plus, depending on the length of a contract required, the monthly fee may end up costing more than the value of the hardware.

Enhanced services

Are additional, enhanced services available to the business. Is training provided? Will someone be available for installation and new system support? Is there a live help desk or just an online chat and a resource library to find the answers on your own? These and other important questions should be asked up front before making a decision.

Fluctuations in customer credit card types

This one is last because it is totally out of your control. But, the information is good to know.

Each customer you welcome to your business may have a different type of credit card even if the logo is Visa, MasterCard, American Express or Discover. This is the un-clear but ever-present difference. While we recommend accepting them all based on the positive customer experience; not all cards are the same. Any reward card that offers the consumer cash back, travel, or other merchandise can impact the transactional rate of the processing fee. Each month a rate can vary based on the types of cards that are run through the POS system. This can make it appear to be the most confusing of all. However, over time, this fluctuating rate can be less overall than a flat percentage.

Our recommendation is – as always – learn what you need to know. Choosing a flat rate vs true merchant service payment processing is an important decision.

Make an educated decision. Choose what is best for your business. We are proud to offer services without a contract and even more proud that our clients stay with us longer than the average competitor. We are happy to offer the education, resources and support necessary to help understand this important aspect of running and managing a business. Contact us to spend the time you need to learn, understand your options and choose the right processing options for your business.