Flat Rate Merchant Processing

Most Small Business owners in Orlando we’ve spoken to have asked “What is flat rate merchant processing?”


Flat rate merchant processing or flat rate pricing is when a merchant is charged ONLY a fixed percentage based off of their credit card volume. I emphasize ONLY because many Merchant Service Providers (MSPs) advertise misleading genres of flat rate processing that ends up costing the business much more than the highlighted fixed rate.

For this reason, if you choose flat rate credit card processing, make sure that the fixed percentage includes every single fee and not a penny more.

The main advantage of flat rate merchant processing is knowing exactly what your credit card processing costs will be every single time you accept a credit card. Being able to budget, forecast, and be prepared for your merchant fees (or any business expense for that matter) is only beneficial.

Pricing Structures

Besides flat rate merchant processing, there are several other pricing structures available. It is important to realize that regardless of the pricing structure offered by a MSP, they all cover atleast the non-negotiable credit card processing fees collected by the establishments who run this industry. Learn more here.

With that being said, there are only 3 pricing structures that you should entertain as a small business owner; Flat rate pricing is one of them.

Here are the top 3 best pricing structures – Click to learn more. 

The best pricing structures will allow you to reduce your credit card processing fees as much as possible because the negotiable fees are transparent and easier to understand. Although flat rate merchant processing does not outline the negotiable markup in a detailed manner like the other 2 best pricing options, its simplicity and straightforwardness allows you to negotiate a great deal that you can count on month after month.

Collecting Fees

Regardless of the pricing structure, there are 2 methods in which merchant service providers collect credit card processing fees from small business owners. There is a big difference between the two methods and knowing these differences can save your business money.

          Daily Discount:

The merchant service provider or credit card processor deducts a percentage of the fees throughout the month and then deducts all other fees at the end of the month. If the merchant is set up on true flat rate merchant processing like we discussed above, the fixed percentage is deducted from each days volume before it is delivered to the merchants bank account.

          Monthly Discount:

The merchant service provider or credit card processor deducts the total fees for the month in one lump sum at the beginning of the following month. If ther merchant is set up on true flat rate pricing, the total monthly discount which is deducted in one lump sum at the beginning of the following month will equal the merchants total volume multiplied by the fixed flat rate percentage.

          What YOU Need To Know:

Unless you have a specific reason for choosing Daily Discount, we encourage you to get set you up with Monthly Discount. The reason we recommend monthly discount is because having just one deduction of fees per month makes it easier to reconcile your books AND getting your your deposits in full throughout the month creates better cash flow for your business.

Daily Discount on the other hand makes it more difficult to reconcile and hurts your cash flow. This because fees are coming out of your bank every day and you are not receiving the gross amount of your sales which would allow you to make better use of your money.

Unless you fully understand your merchant processing fees and are very deligent in regards to the fees coming out of every transaction, this type of fee collection makes it extremely hard to figure out your total cost of credit card processing; In short, it disguises your total cost.

If you have any further questions regarding what type of pricing structure your business has or the currrent method of fee collection you are on, please contact us and we will be more than willing to help. All small business owners in Orlando can contact 1Quest Payment here.

Donnie Troy
Donnie Troy

1Quest Payment’s mission is to help as many merchants as possible find the best credit card processing solution so they can focus their time and energy on growing their business. Contact Donnie today, call 1.800.413.7573 or use our contact form