Are you just starting your business? Do you want to expand to have an online presence? Does your business have multiple locations? No matter your current business size or the future you see for it, there’s a Merchant Service Provider that will fit your business. The challenge is how to choose the best one.
In this post, we will discuss the ideal pricing plans and features you should get out of your Merchant Service Provider based on your business size.
Whether you’re just starting out or you run a mom-and-pop shop, it’s likely you aren’t processing a lot of credit card transactions. With an uncomplicated business model and low processing volume, a simple credit card processing service is ideal. This setup will minimize fees and provide you with only the assets you need to run your business. We recommend that small business owners look for the following pricing models and features in a Merchant Service Provider:
Pricing: Flat or Interchange-Plus
If you’re just starting out, working with a Payment Facilitator (e.g., Stripe or Square) is the path of least resistance to accepting credit cards. There is no underwriting process and you can start accepting payments within minutes of signing up. Flat pricing structures are also very straight forward, as every transaction is charged the same processing rate.
If you’re looking for a pricing plan that will grow with your business, Interchange-plus is your best option. Flat pricing is only beneficial for your business up to a certain point. Once you start processing transactions more regularly and increase your volume, you’re going to want a plan that provides the most cost-savings. Consider where your business stands, and where you see it going, and then compare Flat vs. Interchange-plus pricing before settling on one.
It’s not uncommon for businesses to have a strong presence among both online and brick-and-mortar shoppers. Streamlining the costs and transactions across both channels can be difficult with the wrong merchant service. And, if treated as separate entities, it unnecessarily complicates actions taken after a transaction occurs. For multifaceted businesses, we recommend looking for the following pricing models and features in a Merchant Service Provider:
Tiered or Interchange-plus
If you’re looking for a relatively easy-to-understand rate plan — such as Flat pricing — but want more cost savings, you might consider a Tiered rate plan. Tiered pricing buckets transactions into three categories: Qualified, Mid-Qualified and Non-Qualified. If you want the ultimate cost-savings and are OK with a more complex model, Interchange-plus is the plan for you. Be sure to compare the Tiered and Interchange-plus pricing plans of each Merchant Service Provider you’re considering, as plans can vary per provider.
Whether your business is comprised of various departments, multiple locations or both, it’s a complex business model and has unique needs. Make sure your Merchant Service Provider offers the following pricing plan and features to ensure you’re getting the most out of your processing partner:
Large businesses should always opt for an Interchange-plus pricing plan. Although it’s the most complex of the three plans offered, it provides the most transparency into your rates and offers the most cost-savings. You also benefit from true debit pricing and Interchange refunds on returns.
The right Merchant Service Provider exists no matter your business model, size or future. Consider your business’s current structure, where you’d like to take it and the suggested pricing models and features to look for when assessing your options.
Start a conversation below by telling us your business size, current pricing plan and features you use today. We’d love to see how it compares to our framework.
Editor's Note: This post was originally published in June 2018 and has been updated for comprehensiveness and accuracy.