Pricing a deal is where new agents give away margin and experienced agents give away accounts. Price too high and you lose to the next proposal; price too low and you build a book that pays you nothing and still leaves when someone shaves ten basis points. The job is to find the number that wins the deal and survives three years.
Decide the model before the number
Flat rate is one price for every card. It is simple, it is easy to sell, and it is the right answer for smaller merchants with consumer-heavy card mixes and modest volume, the shop that will never read a statement and wants a number they can remember.
Interchange-plus passes network costs through at cost and adds your markup. It suits higher volume, larger tickets, and merchants whose customers pay with business or premium rewards cards. It is also more defensible over time, because when interchange moves the merchant can see that the change was not you.
The rough crossover sits somewhere between $30,000 and $50,000 a month, earlier when the mix is expensive. But do not quote from a rule of thumb, reprice one of their real months both ways and let the statement decide.
Price from net revenue, not from the headline
Your commission comes from what is left after pass-through costs and the platform’s retained share, so the only number that matters to your income is net revenue on the account. Two deals with identical headline rates can pay very differently depending on the merchant’s card mix.
Before you commit to a rate, work out what the account produces monthly at that price, and then ask whether it is worth the servicing it will require. A high-touch merchant at thin margin is a job you have given yourself; a low-touch merchant at fair margin is an annuity.
Ticket size changes which lever to pull
On small tickets, the per-item fee is the price. At an $8 average ticket, 15¢ is 1.9% and 30¢ is 3.75%, those are the numbers the merchant feels, not the discount rate.
On large tickets, the percentage is everything and the per-item is noise. At a $900 average ticket, the difference between 15¢ and 30¢ is under two hundredths of a percent.
So negotiate the per-item on coffee shops and the percentage on contractors. Agents who apply the same concession pattern to both give away margin where it buys nothing and hold firm where it costs the deal.
Do not price against a claim you cannot see
“I already have 2.2%” is the most common objection in payments and it is almost never a complete sentence. Ask what their effective rate is, total fees divided by total volume, and if they do not know, offer to compute it from their statement.
Half the time the 2.2% is a qualified-tier rate that applies to a minority of their volume. The rest of the time it is real, in which case you should either compete on operations rather than rate or walk away. Repricing against a number you have not verified is how agents end up with a book that earns nothing.
Compete on what the rate does not cover
Rate is the easiest thing for a competitor to beat by a hair. Everything else is stickier.
- Tap to Pay on the phones the crew already carries, moving keyed volume to the lower in-person rate.
- Bank payments at 1% capped at $10 for commercial invoices, frequently the largest single saving in a proposal.
- Recurring billing for a plan book that is currently collected by paper: the subscriptions platform at $49 a month with a 30-day free trial.
- Dispute alerts that let the merchant refund ahead of a chargeback rather than pay the $20 fee and fight.
A merchant who runs their maintenance plans on your platform does not leave over ten basis points, because the switching cost is operational rather than financial. That is how you build a book that survives the next agent with a sharper rate sheet.
Add-on economics belong in the pricing conversation
Software commission lines are usually separate from card commission, so a subscriptions module contributes to your residual on its own terms. That matters when you are deciding how hard to hold on the card rate: a deal with recurring billing attached can justify a tighter card price, because the account’s total value to you is higher and its attrition risk is lower.
Say the whole price out loud
Whatever you land on, present every component: rate, per-item, any monthly fees, chargeback and retrieval fees, and the add-on module if you are proposing one. Owners forgive a price; they do not forgive a discovery.
And lock the pricing at the invite so the number they sign is the number you quoted. An invite whose pricing token is frozen at send removes the most common way a well-priced deal turns into an awkward conversation three weeks later.
What to take away
Choose the model from their statement, not from a rule of thumb. Price from net revenue rather than headline rate, negotiate per-item on small tickets and percentage on large ones, verify any rate they claim before repricing against it, and compete on operations, tapped payments, ACH, recurring billing, dispute alerts, because those are the things a competitor cannot undercut with a basis point.
Michelle Hope
Payments Editor, Paydigo
Michelle Hope writes about payment economics for the businesses that live on them, trade contractors, route-based service companies, and the agents who sell to them. Her work focuses on the unglamorous mechanics: effective rates, recurring-billing recovery, dispute ratios, and the difference between a rate sheet and a statement.