Question 1

What is the cheapest credit card processing pricing model?

Accepted Answer

For most businesses processing over $10,000 per month, interchange plus is the cheapest model because you pay the true wholesale cost plus a small fixed markup. Surcharge and cash discount programs can reduce the merchant's cost to nearly zero by passing the fee to the customer, but they are not the right fit for every business.

Question 2

What is the difference between surcharging and cash discounting?

Accepted Answer

Surcharging adds a fee (up to 3%) to credit card transactions only — debit cards can never be surcharged. Cash discounting builds a service charge into posted prices and discounts it for cash payers. The net effect is similar, but the compliance rules, signage, and receipt requirements differ.

Question 3

Why is flat-rate processing like Stripe or Square more expensive?

Accepted Answer

Flat-rate providers charge the same 2.6%–2.9% on every card, but the wholesale interchange cost of a basic debit card can be under 1%. The provider keeps the difference. On interchange plus pricing, those savings go to you instead.

Question 4

Which pricing model is right for my business?

Accepted Answer

It depends on your monthly volume, average ticket, card mix, and customer expectations. A free statement analysis from Procomm 360 models all four options against your actual numbers so you can compare real dollar costs, not estimates.

Model	How It Works	Best For	Pros	Cons
Interchange Plus	You pay the card network's wholesale cost (interchange) plus a fixed, disclosed markup — e.g. interchange + 0.25% + $0.10.	Businesses processing $10k+/month that want the lowest true cost and full transparency.	Lowest total cost at volume; every fee visible; markup never changes with card type.	Statements are more detailed; monthly cost varies with card mix.
Flat Rate	One fixed percentage on every transaction (like Stripe or Square's 2.6%–2.9% + 30¢), regardless of card type.	Very low-volume or brand-new businesses that value predictability over cost.	Simple, predictable, easy statements.	You overpay heavily on debit and basic credit cards — often 30–40% more than interchange plus.
Surcharge	A compliant fee (up to 3%) is added to credit card transactions, passing the processing cost to the cardholder. Debit cards cannot be surcharged.	B2B, service, and high-ticket businesses whose customers accept card fees.	Merchant's credit card processing cost drops to nearly zero.	Must follow card-brand and state rules; some customers prefer merchants who absorb fees.
Cash Discount	Posted prices include a small service charge that is discounted for customers who pay with cash or check.	Retail, restaurants, and convenience businesses with frequent cash payers.	Eliminates most processing costs while rewarding cash customers; simpler compliance than surcharging in many states.	Requires clear signage and correct receipt formatting; slight menu/price presentation changes.

Credit Card Processing Pricing Models, Compared

Which model should you choose?

Pricing Model FAQs

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