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The Best Credit Card Pricing Model for Your Business

If your business accepts credit cards, you are probably paying for these services through one of the three most common pricing models: tiered, flat rate, or interchange plus. As a merchant, you should be familiar with all three options in order to determine the best fit for your business.

Tiered Pricing

This method of pricing works on a tiered qualification system. Typically the merchant service provider will divide transactions into several classifications or “buckets” and charge a transaction rate for each tier. You may see tiers listed in several ways. For example, some merchant services divide their tiers into various qualification levels. As such, Qualified transactions might be charged at a rate of 1.XX, Mid-Qualified at 2.XX% and Non-Qualified at 3.XX%. This tiered system works well for merchants if they can get all or most of their transactions in that lowest priced tier.

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