Flat-rate pricing
Also known as: Flat rate, Single-rate pricing
Flat-rate pricing charges a merchant one percentage on every card payment, whatever the card, often with no fixed fee per payment. It is the simplest bill to read, but the rate is set for an average card mix, so cheap cards help pay for expensive ones.
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Example
Illustrative numbers only. A café pays 1.5% on every card payment, whether the customer taps a French debit card or a foreign business card. The provider has set that rate for an average mix of cards.
One rate is the easiest promise in payments. Sales times the rate, and you know the bill.
Flat-rate pricing means the merchant service charge is a single percentage for every card payment. Consumer debit, premium credit, a business card, a card from abroad: the same rate. Many flat-rate offers add no fixed fee per payment, and some have no subscription.
The catch is that the cards do not cost the provider the same. The Interchange Fee Regulation caps interchange on consumer cards at 0.2% for debit and 0.3% for credit, but commercial cards are excluded (Article 1(3)). Cards issued outside the EEA are not covered either, though Visa and Mastercard have committed to the European Commission to cap in-store payments with them at the same levels until November 2029. Cartes Bancaires publishes its French rates by card category, in force since 1 January 2021: 0.2% on a debit card, 0.3% on a credit card and 0.9% on a business card. The UK Payment Systems Regulator explains what any single headline rate has to do: the provider sets it at a level that recovers interchange fees "across the mix of transactions that the merchant accepts".
Flat rate and blended pricing are close cousins. In everyday use, a flat rate is one rate for everything, while blended usually means a few rates, for example by card type or region, sometimes with a fixed fee. In EU law both are blended merchant service charges: Article 9 makes itemised charges the default, so a merchant chooses either in writing.
What merchants get wrong is reading a flat rate as the price of their own cards. It is the price of an average. The European Commission noted that small merchants may still prefer simple rates, because they lack the capacity to process long, complex fee lists. That can be the right trade. If most of your customers pay with consumer debit cards, it is worth checking what the trade costs. If many pay with business or foreign cards, a flat rate can work in your favour.
A flat rate buys you simplicity. Your card mix decides the price.
