What is payment processing pricing?
Payment processing pricing is the structure of fees merchants pay to accept credit and debit card transactions. The three most common models are flat rate (one blended percentage per transaction), interchange-plus (wholesale interchange cost plus a fixed markup), and dual pricing (cardholder pays a service fee, merchant pays zero processing cost). Each model distributes costs differently: flat rate offers simplicity but typically higher effective rates, interchange-plus provides transparency by separating bank fees from processor markup, and dual pricing shifts the processing expense to the customer when they choose card payment over cash. Understanding which pricing model aligns with your transaction patterns, average ticket size, and customer payment preferences determines your monthly cost and margin retention. Payment processing pricing is not one-size-fits-all; it reflects your industry risk, processing volume, equipment needs, and the underwriting criteria of the back-end processor that ultimately settles your funds.