Better Payments Competitive Rates
Get visibility and guidance into wholesale costs, features, and guidance to drive maximal margin for each customer segment.
Why Rates Differ
Debit Cards
Are less expensive (often under .05%) due to being attached to their bank account that fund the transaction. It is excellent if your customers use debit card often.
Credit Cards (Visa/MC)
Typically range 1.5–2.5% on average. In-person transactions (swipe, dip, tap) qualify for lower rates than online or manually keyed orders.
American Express
Generally runs slightly higher due to their reward structure and rates are volume based on transaction amounts.
ACH / eCheck
Is a strong addition to your billing model. Lowest fees available and often less disputes.
Key Components of Merchant Fees
Interchange Fees : Paid to the bank that issued the customer's card.
Assessment Fees : Paid to card networks (Visa, Mastercard, etc.).
Processor Fees : Paid to the merchant service provider for facilitating the transaction.
Incidental / Other Fees : Include monthly statement fees, chargeback fees, payment gateway fees, and early termination fees.
Common Merchant Services Pricing Models
Interchange-Plus Pricing:
This model passes through wholesale interchange fees set by card brands (e.g., Visa, Mastercard) and adds a fixed processor markup.
- Pros: Highly transparent, often the most cost-effective long-term.
- Cons: Harder to forecast exact costs because interchange rates vary.
Flat-Rate Pricing:
A fixed percentage and fee per transaction, regardless of the card type used.
- Pros: Simple to understand, ideal for low-volume or new businesses.
- Cons: Often higher fees on premium cards. Examples include Square and PayPal.
Tiered Pricing:
Transactions are grouped into "qualified" (least expensive), "mid-qualified," and "non-qualified" (most expensive) buckets.
- Pros: Simple initial structure.
- Cons: Often less transparent and can lead to higher, hidden costs, as many transactions fall into the higher-fee tiers.