123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Travel >> View Article

Understanding Pricing Models Of Payment Processor

Profile Picture
By Author: Patrick Daniel
Total Articles: 33
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Accepting credit cards and debit cards can be a significant cost for any business. Transaction fees, such as interchange and assessments, are a major driver of payment processing costs. Processor fees, also known as "markup," are another significant component. The pricing models that processors provide to merchants determine how these fees combine to produce the monthly cost of payment processing.

Payment processing fees are the costs incurred by business owners when processing customer payments. A merchant's payment fees are determined by a number of variables, including the transaction's level of risk, the type of card used (reward, business, corporate, etc.), and the pricing structure chosen by a given payment processor.
Flat Rate
Flat-rate fees are payment plans in which the payment processor charges the same fee for all transactions, regardless of the type of card used, the brand used, or whether the purchase was made in-store or online. Flat-rate fees are calculated as a percentage of the transaction value or as a percentage of the purchase value plus a fixed fee.
New businesses that do not handle ...
... a large volume of transactions prefer flat-rate fees because they can negotiate a fee with the payment processor. Additionally, the company is aware of the fees that will be charged each time a payment is processed.
Tiered
In a tiered pricing model, the processor divides the interchange fees into three categories based on the transaction's risk level. Payments are divided into three rate categories: qualified, mid-qualified, and non-qualified. The processor assigns transactions to each category based on criteria established by the processor.
Qualified Rate: Transactions swiped in person at a physical terminal with a standard credit card fall into this category, carrying the lowest risk and the lowest rates.
Mid-Qualified Rate: Businesses pay a higher rate to cover the high risk of fraud in keyed-in transactions such as phone and direct mail orders where the credit card is not physically available.
Non-Qualified Rate: Non-qualified rates apply to transactions that do not qualify for the qualified or mid-qualified tiers. The non-qualified tier has the most expensive fees.
Interchange Plus
In simplified terms, interchange plus pricing divides the merchant service charge (the rate paid) into two parts. The interchange is the fee charged by the issuing bank to the card network, and the plus, or markup, is the fee charged by the card network to you. If the interchange fee rate on a card is changed by a card network, that component of the merchant service charge is automatically updated.

Wondering which pricing model best suits your business? It is reliable on your business type and its payment processing requirements, Radiant Pay is the one-stop solution to get your Payment Solutions according to the requirements of business demand. For both low-risk and high-risk businesses, we provide all types of merchant account solutions. You won't ever miss an opportunity to receive payments with our Online & Mobile inclusive solutions.

Total Views: 484Word Count: 472See All articles From Author

Add Comment

Travel Articles

1. What Is The Best Time Of Year For A Lodge Safari In Kenya?
Author: Nadzua Matara

2. Goa Tour Package From Delhi – Best Deals By Farepayer Travels
Author: Farepayer

3. Best Last Minute Flight Deals
Author: welovetravel

4. Andaman Emerald Holidays At International Travel Mart In India Pune 2024
Author: Probin Das

5. What Are The Things I Should Know Before Going To Andaman And Nicobar Island By Ltc?
Author: Probin Das

6. What Is Required For Andaman Trip?
Author: Probin Das

7. Is It Better To Visit Andaman And Nicobar At The End Of June Or Beginning Of July?
Author: Probin Das

8. Andaman Emerald Holidays At India International Travel Mart Hyderabad 2024
Author: Probin Das

9. How Is Andaman In The Month Of July?
Author: Probin Das

10. Expensive / Cheapest - Visiting Andaman Islands
Author: Probin Das

11. Whispers Of The Mekong: A South Vietnam Itinerary Unraveled
Author: Sao La Vietnam Tours

12. Heritage And Culture: Explore Ancient Andaman
Author: Probin Das

13. Andaman Eco-tourism Packages : Wildlife & Nature Trails
Author: Probin Das

14. Discover The Best Annapurna Trekking Adventures: Short, Classic And High-altitude Lakes
Author: trekkingtoeverest

15. Exploring The Best Everest Trekking Options: Short, Challenging And Luxurious Adventures
Author: trekkingtoeverest

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: