As you explore options for a credit card processor, you’ll notice that rates and how they’re structured are big differentiators between companies. Of course, you want to choose the option that best fits your needs — but such a variety of prices and plans can be confusing.

Not to worry. We’re here to break down those fees and structures for you. That way, you can feel confident in making the right choice for your small business.

Common Credit Card Processing Fees, Explained

Offering customers choices is a good business practice in many ways. Car companies make different models to appeal to a variety of buyers. And even credit cards themselves come with APRs, financing options, and rewards suited to their different types of customers.

Choices exist in the world of credit card processors, too. Companies that offer multiple payment structures allow their customers to select one that will most benefit them according to the transactions they complete most often. But having too many choices isn’t necessarily good.

It’s commonly called the paradox of choice, a phrase coined by psychologist Barry Schwartz. Put simply, the paradox implies that having so many choices can make you less likely to choose or, at least, less confident in your choice.

In this case, though, you must choose. So to make that choice a little easier, let’s walk through the three most common types of rate structures.

What Is Tiered Pricing In Credit Card Processing?

A tiered pricing structure comes with more variables than any other structure. Here, every transaction will be rated as either qualified, mid-qualified, or non-qualified. Processing rates are lowest for qualified transactions and highest for non-qualified ones.

In most tiered credit card processing structures, qualified payments include a physical credit card swipe, dip, or tap, along with an authorized signature. If the card is a rewards card or private-label card, it will most likely be considered mid-qualified. E-commerce and keyed-in transactions are generally considered non-qualified and therefore come with the highest rates.

Pro tip: With Schedulicity, you have access to payment processing all at one low rate: 2.5% + 15¢. So that means your processing rate is always the same — whether you’re collecting prepayments or charging clients via text message with Norm.

What Does Interchange Mean In Credit Card Processing?

If you want some options, but not quite so many and not the kind that discourage e-commerce transactions, then an interchange pricing model may be a better fit. Interchange structures, including wholesale and cost-plus models, offer multiple rates set by the credit card association.

There are fewer options in an interchange model, but the rates are non-negotiable. Essentially, you agree to pay the exact markup percentage and per-item fees that your processor has agreed to pay the association.

While an interchange structure is a little more straightforward than a tiered structure, the multiple rates can still make your end-of-month statements confusing. Not ideal for a busy small business owner.

What Is Flat-Rate Credit Card Processing?

The biggest testament to the paradox of credit card processing choices is that the most frequently used systems are those that offer simple, flat rates. This means you will always be charged a flat rate for each transaction, no matter how another structure would categorize it.

Flat rate credit card processing fees are similar to interchange plus credit card processing rates, but they aren’t subject to the association’s discretion. The credit card processor sets the rates you pay for card-present transactions and for card-not-present transactions. That’s it — just two rates to keep track of.

Sounds simple, right? That’s because it is.

Which Fee Structure Does Schedulicity Use?

As a small business owner, your plate is packed full of things to do every day. You don’t need the extra hassle of researching pricing tiers. When you sign up for our Unlimited Plan, you also get access to payment processing.

With Schedulicity’s built-in payment processing, you can accept and process payments within our scheduling app at one rate of only 2.5% + 15¢ for every type of transaction. That includes paying by text message with Norm, which allows clients to pay and tip instantly straight from their own phone.


With the most common credit card processing fees explained, we hope you feel more confident about your choice of a credit card processor. Our goal is to simplify the process of managing your business, and that starts with our offer of one industry-low flat rate. Click here to get started with Schedulicity’s payment processing today.

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