Understanding Merchant Pricing Structures

Payabli offers several pricing structures for merchants (your paypoints). The Payabli team discusses these structures during integration to help you choose the one that best meets your needs.

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Interchange Plus

Interchange Plus pricing is a credit card processing rate that consists of cost of interchange fees (determined by the card brands) and processor markup. Interchange fees are variable based on card type, but the processor markup is a fixed rate that’s applied to each transaction.

Whenever a merchant processes a transaction that’s eligible for a lower interchange fee, they benefit from the lower rates. If a merchant is on a flat rate pricing structure then they pay the same amount despite whether a transaction is eligible for a lower exchange rate.

The interchange rate that’s applied to a transaction is based on a number of different attributes such as:

• Transaction size
• AVS and other security features
• Merchant size
• Industry or MCC
• Card type (debit, credit, rewards, and so on.)

Typically, the card networks update the interchange rates twice a year.

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Flat Rate

Flat Rate pricing is a fixed rate for all processing fees, including interchange and processor markup. The pricing remains consistent regardless of what type of card is used. Flat rate pricing is easy for merchants to understand because interchange fees and markups are bundled together, and is great for businesses that don’t process a lot of credit cards.

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Tiered Pricing

Tiered pricing is similar to flat rate, but groups transactions into different “tiers” based on the type of card used. Each tier can have a different rate, and the rate is applied to all transactions in that tier. For example, with tiered pricing you can set American Express cards to a higher rate to offset their higher processing fees.

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Pass-through

Pass-through pricing is an option that allows paypoints to pass the cost of processing fees onto the payor using a fee. When pass-through fees are configured, you can choose either a percentage or a flat rate to add at the time of transaction to cover the cost of processing.

The Payabli team configures pass-through fees during merchant onboarding. To convert a merchant profile to a Pass-through pricing structure, reach out to Payabli Support.

For a tactical guide on implementing fees, see Pass-through Fees.

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Charging pass-through fees

If you’re using pass-through fees, be sure to include a notice at the point of sale. Making the cardholder aware of a fee before running the transaction helps to minimize disputes. Payabli recommends a notice like this one:

Payment Processing is handled by a Third Party Payments Platform that securely handles all card transactions processed through this Payment Page. The Payment Platform charges a “Service Fee” to cover the cost of securely processing the transaction to the payment networks and bring this service to you.

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Refunding pass-through fees

Pass-through fees cover the standard processing cost for the original transaction, and aren’t returned when a merchant issues a full or partial refund to customers. Letting customers know at time of transaction that the fee is non-refundable helps minimize disputes.