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Craft Beer Times | Exploring POS Fee Structures: Understanding Interchange Plus and Flat-Rate Processing

Exploring POS Fee Structures: Understanding Interchange Plus and Flat-Rate Processing

Exploring POS Fee Structures: Understanding Interchange Plus and Flat-Rate Processing

The World of Point of Sale Fees

As a business owner, you want to make sure you’re getting the most out of every transaction that takes place in your brick-and-mortar store or online shop. Whether you’re just starting out or you’re looking to optimize your existing payment processing, one of the most important decisions you’ll need to make is what type of fee structure you want to use. And that’s where interchange plus and flat-rate processing come in.

Interchange Plus Processing

Interchange plus processing is a fee structure where the merchant pays a percentage of every sale to the credit card companies themselves. This is known as the “interchange” fee. In addition to the interchange fee, the merchant pays a separate fee to the payment processor, which is usually a percentage of the sale or a per-transaction fee. This type of fee structure can be beneficial for high-volume businesses that have a lot of large sales, as the interchange fee tends to be lower for larger transactions. However, it can also be a bit more complicated to understand and may require more accounting work to keep track of all the different fees.

Flat-Rate Processing

In contrast to interchange plus processing, flat-rate processing charges a fixed percentage for every transaction taken, regardless of the size or type of the transaction. This fee structure is often simpler to understand and can be more predictable for business owners who prefer to have a set rate for every transaction. However, it may not be the most cost-effective option for businesses that frequently make larger transactions, as the percentage charged may end up being higher than the interchange fee they would pay under interchange plus processing.

Which One is Right for You?

Ultimately, the right fee structure for your business will depend on a variety of factors, including your volume of sales, average transaction size, type of business, and more. It’s important to evaluate both interchange plus and flat-rate processing to determine which one is best suited for your particular needs. In addition to looking at the actual rates themselves, it’s also worth considering the level of support and resources provided by the payment processor for each fee structure.

Final Thoughts

It can be overwhelming to navigate the world of point of sale fees, but taking the time to carefully consider your options can pay off in the long run. By choosing the right fee structure for your business, you can save money and streamline your accounting processes. Whether you opt for interchange plus or flat-rate processing, it’s important to work with a trusted payment processor who can help guide you through the process and answer any questions you may have along the way.


Dustin is a writer about craft beer and a professional brewer in the city of Chicago. He has written for several magazines and has over a decade of experience in the beer industry. He is currently working on a book about the history of beer in Chicago.

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