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Start a career in the merchant services sales industry. Start selling merchant accounts and credit card processing services and POS equipment.
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Welcome to the largest site to find merchant services careers and credit card processing careers. Get into merchant services sales and credit card pro
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learn more about how to become a payment facilitator, join NAB and become the best payment facilitator company. Partner up with a payment facilitator,
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Flat Rate Credit Card Processing | The Benefits and Drawbacks
Sunday, May 02 2021

If you are a first-time or small business owner, then you may have heard of flat-rate credit card processing. Every business needs a provider for credit card processing, as it is one of the most important aspects of any business--the ability to accept payments. However, choosing a provider and a fee structure can be a challenge that takes time, energy, and research. If you’re going to succeed, then you need to be familiar with every type of processing service and why they might be suitable for you. One of the most popular services purchased by small businesses when it comes to credit card pressing is flat-rate credit card processing.

 

Flat-rate credit card processing has many benefits, but it's not the right situation for every business. This brief analysis of flat-rate credit card processing will give you some insight that helps you decide whether flat-rate credit card processing is the right option for you, or if it's a bad choice for your specific business.

 

Credit card processing isn’t always the easiest concept or industry to understand

As a business owner, you are already aware of some of the struggles that you can experience when trying to determine a credit card processing provider. It is one of the most difficult things to do as a business owner, especially if you are trying to estimate the cost of accepting credit cards using a merchant services provider. Determining these costs can be difficult, which is why some business owners are drawn to a flat-rate processing model where the pricing is easier to understand.

 

However, these decisions depend on so many factors that it becomes a time-consuming task to determine which pricing model is best for you. To make it easier, this article will serve as a knowledge base and guide to helping you understand the factors that go into this decision and what concepts you need to understand.

 

Definition of flat-rate credit card processing

The first important concept of credit card processing to know is what exactly flat-rate credit card processing is. If you’re going to determine if it is the right choice for you, then knowing what it entails is the first and most important step. With an understanding of what flat-rate credit card processing is, you’ll be well on your way to understanding it at a deep enough level to decide whether it is the right choice for you.

 

Credit card processing isn’t free. It costs the merchant a fee to implement and accept payment processing solutions. The variable here is what the cost is. Just like in any purchase, there are varying costs from different providers. Though consumers don’t consider it, it is the reality of being a business owner. In addition to trying to find the lowest fee, merchants also face the possibility that credit card processing fees will vary within the credit processing provider that they choose.

 

One of the most significant and common reasons for credit card processing fees to fluctuate is the various fees charged by Visa, Mastercard, and other suppliers for using the card. In addition, there are fees charged by the issuing bank for the transaction and there are a couple more mouths to feed along the way. There are hundreds of services that are involved in this process and each one takes a different sized bite. For this reason, credit card processing fees can often fluctuate and have business owners confused about what they are actually paying to process credit card transactions.

 

To simplify things and make it easier for the merchant to understand, credit card processing companies have begun to offer flat-rate credit card processing fees. With flat-rate credit card processing fees, merchants are more able to predict exactly what the cost of accepting credit cards will be and forecast that into their profits and margin calculations. It comes with many benefits, but it’s not right for every business.

 

Benefits of Flat-Price Processing

As you can imagine, there are many benefits to flat-rate processing and that is why it is so commonly used by businesses that are seeking simplicity in their processing arrangements. When you have flat-price processing, there are a few aspects to love about your credit card processing agreement.

Predictability

The first benefit of using flat-rate credit card processing is being able to have a predictable credit card processing fee each month. With predictability in the rates that you are charged to process credit card transactions, you can not only plan your expenses better, but you can also price goods and services better to provide you with a more consistent margin.

 

When you know what your processing rate is going to be, the need to fluctuate your item pricing will disappear. You can plan ahead and be sure of what you are going to be charged to process credit card transactions.

Flexibility

When you have a flat-rate processing plan, another benefit that you will be entitled to is the flexibility that comes with these processing plans. With flat-rate credit card processing plans, you often don’t have to get locked into long-term commitments that hinder your flexibility and make it difficult to plan ahead. For small businesses looking for short-term credit card processing or to lessen the long-term overhead for their business, this is the ideal situation.

 

Flexibility is also a benefit to any business that might be considered high-risk or in general need of agility due to possible changes in the business model, revenue, and other aspects affecting their business.

Simplicity

When you work with a flat-rate credit card processing contract, one of the most important benefits is the simplicity of the contract. As we touched on earlier, traditional credit card processing agreements will often feature clauses, charges, and fees that you don't even have access to seeing the details on. For this reason, in those arrangements, you can never tell exactly what your credit card processing fee will end up being.

 

However, with a flat-rate processing plan, you can always understand what the fees are and exactly how they impact your business. You can plan to include enough margin for your processing fees and make it easier to understand the implications of your credit card processing agreement.

 

Who is a good candidate for flat-rate processing?

If you are considering flat-rate processing for your business, you probably want to know a bit more information about who is a good candidate for flat-rate processing and which businesses should pursue flat-rate processing for their processing needs. It is very easy to identify merchants that are good fits for flat-rate processing because of the straightforward nature of flat-rate processing.

Startups

Startups are the ideal businesses for flat-rate processing because they usually need to have less overhead and a shorter contract. Startups are often young and unstable, so having a processor that is flexible in the terms is ideal. Startups also typically have a lower volume of transactions. Many credit card processing companies have solutions that are specifically geared towards the needs of startups and young companies.

Small Businesses

Small and local businesses are another frequent customer of flat-rate processing solutions. This is because small and local businesses typically have a much lower volume of transactions than larger companies and they are unable to attain better rates. In addition, small businesses are slightly more unstable and higher risk than other companies and don’t have the leverage to get favorable contracts with other processing solutions.

High-Risk Businesses

Businesses that are higher risk industries also tend to use flat-rate processing because they are subject to riskier transactions that could lead to increased fees by processing companies. If they are able to get an account with a flat-rate processor, then high-risk businesses typically take that opportunity because it is a favorable situation for them. 

 

Doing better than flat-rate processing

For some, flat-rate processing simply isn’t a great option. This leaves many wondering if it’s possible to get a better deal than flat-rate processing. It’s true, there are some downsides to flat-rate processing and that is the reason that some choose to pursue other options. It is possible to get a better deal than flat-rate processing has to offer, but there are certain conditions that you have to meet.

 

The first condition that you have to meet if you want to get a better deal on your processing than what flat-rate processing has to offer is that you have to be able to do a high volume of transactions. The higher the volume, the better deal you are going to get on your processing.

 

Another condition that you will have to meet if you are going to get a better rate than what most flat-rate processing solutions have to offer is you will most likely have to sign a longer-term contract for your processing needs. This means less flexibility, but it is possible that you will get a better rate, though it will be dynamic and subject to change.

 

If you are a business that cannot get flat-rate processing or you do a high volume of transactions for an established and long-lasting business, then you can possibly get a better deal by going with a solution other than flat-rate processing.

 

 

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Saturday, 03 April 2021
Merchant services sales training is important to help you learn the ropes about payment processing business and become a successful merchant services
Thursday, 11 June 2020
Start a career in the merchant services sales industry. Start selling merchant accounts and credit card processing services and POS equipment.
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Tuesday, 29 September 2020
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Sunday, 31 May 2020
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Helpful Links

Sunday, 02 May 2021
Become a merchant services provider and offer credit card processing, merchant services and other payment processing services to merchant that want to
Sunday, 24 May 2020
As part of our Merchant Services Sales Partner Program our Credit Card Processing Agents can Sell Merchant Accounts. Join our Sales Partner Programs
Monday, 10 May 2021
Join our Merchant Account Reseller Program where you get huge bonuses for selling credit card processing and merchant services.
Tuesday, 29 September 2020
Become a merchant cash advance agent and start selling merchant cash advance deals today. Our merchant cash advance ISO program is the best in the cou
Wednesday, 03 June 2020
Selling merchant cash advances are lucrative and cash help small businesses by becoming a merchant cash advance agent or ISO. Join our program.
Thursday, 13 May 2021
Looking for the best Merchant Account Affiliate Program. Find the top Credit Card Processing Affiliate Programs with North American Bancard.
Monday, 29 June 2020
Build lifelong relationships with our Cash Discount Agent Program. Agents and ISOs looking for the best cash discount program to sell to merchants.
Tuesday, 09 June 2020
Become a Cash Discount Program ISO with North American Bancard. Sell Cash Discounting to merchants and offer a cash discount reward program.
Thursday, 09 July 2020
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Tuesday, 19 May 2020
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Thursday, 18 February 2021
Become a merchant services consultant, merchant account consulting, credit card processing consulting, merchant services consulting, credit card proce
Thursday, 01 April 2021
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Tuesday, 16 February 2021
Start selling merchant accounts from home and selling credit card processing from home. Become a merchant account salesperson.
Saturday, 23 May 2020
Topics include high risk merchant processors, high risk credit card processors, high risk merchant services, high risk merchant accounts and more
    Disclaimer

    © Shaw Merchant Group, LLC. Our goal is to gather accurate, updated information and assist you in your research. We recommended that you check with your service provider or financial institution directly and get independent financial advice before making any commitments or business decisions. 

    Company logos, names, and trademarks mentioned on this site belong to their respective owners.

    All merchant related services and products are referred to North American Bancard for first right of refusal. All information generated on this site is shared with NAB. North American Bancard is a registered ISO of Wells Fargo Bank N.A., Walnut Creek CA, of BMO Harris N.A., Chicage, IL and The Bancorp, Philadelphia, PA.