There are generally three different ways how your merchant account provider will charge transaction fees: Interchange Plus Rates Interchange-plus rates are very technical and vary on a case-by-case basis. For the exact transaction fees charged, businesses will have to consult their chosen merchant account provider. Factors that affect pricing include card type and transaction manner, among others. Basically, the idea here is that an interchange rate is charged per transaction and a small fee called the discount rate. Hence, the name interchange plus rate. The interchange plus rate type of pricing is ideal for businesses willing to spend a reasonable amount of time on accounting and market research. You'll have to determine what type of credit card your customers prefer, what the fees are, and how they affect profits. If done properly, business owners may be able to increase their profits. Tiered Rates A tiered pricing system charges merchants based on the tier of the current transaction. Your merchant account provider can have different tiers for debit/credit cards, reward cards, debit cards, and each one will have a different per-transaction fee. Going by the given example, transactions paid with gift cards would have a different rate than those paid with credit cards. This type of payment method is ideal for businesses who know exactly what cards their customers patronize. If they often use cards classified under a tier with a low per-transaction fee, tiered pricing may work for you. However, if you are unsure of what transactions customers prefer or if they often opt for high fees per transaction, explore other payment methods such as flat-rate pricing. Flat-Rate Pricing The idea here is businesses will have to pay a flat rate—which is usually somewhere around 1.75% to 3%—plus a per-transaction fee on all credit card payments made through their processor. Many first-time small business entrepreneurs go for the flat-rate pricing system because of its ease. There's no need to spend hours calculating the fees paid per transaction because they don't change—no matter who the customer is, what card type is used, and how the transaction was made.