When you sign up with a payment processor, you’re agreeing to a pricing model, not just a rate. The model determines how much you actually pay per transaction, how visible your costs are, and how much room you have to optimize.
Two Ways Payment Processors Can Charge You
There are two main structures. They lead to very different outcomes depending on your transaction volume and business type.
Flat Rate Pricing: Simple, Predictable, Usually More Expensive
Flat rate is exactly what it sounds like. Every transaction costs the same percentage, regardless of card type, transaction method, or merchant category.
A processor might quote you 2.9% plus $0.30 per transaction. Whether the card is a basic Visa, a corporate Amex, or a rewards card swiped at your counter, the rate stays the same.
Why businesses choose it:
It’s easy to understand. It’s easy to budget. There’s no interchange table to decode, no monthly statements that require a finance degree to read. For businesses processing modest volume, the simplicity is worth the premium.
Where it costs you:
Flat rate pricing bundles the processor’s margin on top of every transaction, including the low-risk ones. A card present swipe on a basic Visa might carry an actual interchange cost of 1.5%. Under flat rate, you’re paying 2.9%. That gap is the processor’s margin, and it stays constant whether the underlying interchange is cheap or expensive.
At low volume, that margin is manageable. At high volume, it adds up fast.
Interchange Plus Pricing: What You Actually Pay
Interchange plus pricing is a payment processing model where the actual interchange fee (set by Visa and Mastercard) is passed through to you separately, and the processor charges its own markup on top. Your statement shows both numbers. You can see exactly what each transaction cost at the interchange level, and exactly what the processor added on top.
A typical interchange plus quote might look like: interchange + 0.2% + $0.10 per transaction. The interchange portion moves with the market and the transaction type. The 0.2% is the processor’s cut.
Why businesses choose it:
Transparency. You know what you’re paying and why. You can compare processors by their markup alone, because the interchange portion is the same no matter who you use.
And when your interchange costs drop (because you’re swiping more cards, optimizing your merchant category, or running fewer high-risk transactions), the savings flow directly to you.
Where it gets complicated:
The statements are more detailed. The rate on any given transaction isn’t a single number. It depends on the interchange tier that transaction hit. If no one on your team can read those statements, the transparency advantage disappears.
That’s a solvable problem, but it’s worth factoring into the decision.
The Math: When Does It Actually Matter?
The difference between flat rate and interchange plus isn’t meaningful at low volume. It becomes significant fast as transactions scale.
Take a straightforward example. A business processing $500,000 a month in card transactions on flat rate at 2.9% pays $14,500 in processing fees. The same business on interchange plus, assuming an average blended interchange of 1.8% plus a 0.25% processor markup, pays roughly $10,250. That’s $4,250 a month. Over a year, that’s more than $50,000.
The number grows linearly with volume. A $2 billion retailer isn’t choosing between pricing models; they’re choosing between millions of dollars.
This is why card present capability matters even for companies that don’t think of themselves as retailers.
Which Model Fits Which D365 Environment?
The right pricing model isn’t about which one sounds better. It’s about matching the model to how your business actually processes payments.
D365 Commerce (retail, omnichannel, high transaction volume)
Interchange plus. The transaction volume justifies the complexity. Most mid-to-large retail implementations are already on interchange plus or should be evaluating it. The card present vs card not present mix in retail also means there’s real optimization opportunity. Interchange plus is the only model where those savings show up in your costs.
D365 Finance (B2B, mixed payment methods, invoiced revenue)
Depends on the mix. If credit card volume is a small percentage of total revenue, with ACH, wire, or net-30 making up most of it, flat rate on the card portion may be fine. If card volume is significant, interchange plus makes more sense. The key question: what percentage of your revenue actually runs through card transactions?
D365 Customer Engagement (Customer Service, Field Service)
Flat rate, and the pricing model is rarely the thing worth optimizing here. Customer Service and Field Service environments process payments infrequently — a deposit on a service contract, a charge for a field technician’s visit, a refund issued during a support case. The volume per transaction is usually low enough that the difference between flat rate and interchange plus is negligible. The bigger question for CE implementations isn’t which pricing model to choose; it’s whether payment processing is even set up at all, and whether it’s connected to the right back-office workflows when it is.
D365 Business Central (lower volume, simpler operations)
Flat rate is usually the right call. The volume doesn’t justify the added complexity of interchange plus, and the simplicity of a single rate keeps reconciliation straightforward.
What to Watch For in Either Model
Pricing model isn’t the only thing that matters. How the processor structures the agreement around it does too.
On flat rate: Watch for tiered flat rate structures. Some processors quote a single rate but actually charge different rates based on transaction type — card present vs card not present, debit vs credit, domestic vs international. That’s not true flat rate. It’s flat rate marketing with interchange-style complexity underneath.
On interchange plus: Watch for the markup ceiling. Some agreements cap the processor’s markup but let interchange pass through unchecked. Others bundle certain fees into the markup that should be itemized. Ask for a sample statement before you sign.
On both: Watch for early termination fees, hardware lock-in, and auto-renewal clauses. The pricing model is only part of the total cost. The contract structure determines whether you can actually act on what you learn.
The Question to Ask Before You Sign
Before committing to a pricing model with any processor for your D365 implementation, one question cuts through the noise:
Show me what I would have actually paid last month on each model.
If the processor can’t produce that comparison, or won’t, that tells you something. A processor confident in their pricing model should be able to demonstrate the value of interchange plus or the simplicity of flat rate against your real transaction data.
If you don’t have transaction data yet (pre-go-live), ask for a sample based on industry benchmarks for your merchant category. The estimate won’t be exact. But it surfaces whether the pricing model conversation is even worth having for your volume.
The Pathfynder Approach to Payment Pricing Models
Pathfynder evaluates pricing models as part of the processor selection, not as an afterthought.
That means looking at your transaction mix, card present ratios, and volume projections before recommending a model. It also means comparing what you’d actually pay across multiple processors — not just their quoted rates.
The goal: a pricing structure that matches your business, with full visibility into where every dollar of processing cost goes.
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