Fattmerchant Credit Card Processing – Does it really compare?

by Ben Dwyer

Anyone who comes across Fattmerchant probably perks up at the promise of no markup for credit card processing. The ability to take credit cards and not have to pay a markup to the processor? Sounds great! But before you rush to sign up, let’s take a look at what it really means and how to accurately compare your options.

Note: Fattmerchant has changed its name to Stax. We’re preserving this profile for historical record, but have created a new review of the Stax offering, available here: Stax credit card processing review.

At the time of this update, Stax utilizes the same pricing model as Fattmerchant did, and some of the information contained below may still be relevant. However, it’s important to review all terms and pricing from Stax, not from this Fattmerchant review.

Fattmerchant Charges a Markup – Just Not a Percentage

Fattmerchant is putting a trendy spin on its credit card processing markup, but it does still charge a markup. The more accurate statement is that Fattmerchant doesn’t charge a percentage markup. Instead, it charges a higher monthly fee and a per-transaction fee. Those costs are in addition to the costs of interchange and assessments, or what CardFellow refers to as the “wholesale” cost of processing. Any fees beyond interchange and assessments are Fattmerchant’s markup, whether it’s a percentage, a monthly fee, or a flat fee. So how much does Fattmerchant charge?

Businesses taking cards with a traditional terminal or POS system can expect to pay $99/month + 8 cents per transaction on top of the costs of interchange and assessments. Businesses taking payments online or by mobile device will pay $79/month + 15 cents per transaction on top of wholesale costs. Businesses processing more than $1 million/year will have different rates and fees, which start at $199/month.

All processors charge a markup; it’s how they make money. Fattmerchant needs to make money to stay in business, so it charges a markup.The

Types of Markups

One thing that makes comparing quotes from processors so confusing is that a markup can take many different forms, such as monthly fees, annual fees, per-transaction fees, and percentages. Processors have a lot of freedom to charge their markups however they want. As we see above, Fattmerchant charges its markup as a monthly fee and a per-transaction fee.

As mentioned already, “markup” is any fee added to the cost of interchange and assessments (the fees paid to the banks and the credit card brands.) While there are many interchange categories and assessments, it is a finite list. Anything charged to you that is not a legitimate assessment or an interchange charge is a markup charged by the processor.

Sorting out what is an unavoidable cost and what’s a markup can be confusing for even the most knowledgeable businesspeople. Using a free service like CardFellow to find a credit card processor will show you quotes from processors with markups separated from wholesale costs. Save yourself the time of trying to determine how each processor charges its markup – CardFellow will crunch the numbers for you.

Comparing Your Options

Fattmerchant’s 0% markup flat rate processing sounds great, but is it really the most competitive option for your business? In some cases it might be, but in others it isn’t. The best credit card processing solution for you will depend on your specific business profile. Don’t assume Fattmerchant (or any flat rate credit card processing) is the most competitive option until you see how it stacks up for your business with CardFellow’s credit card processing comparison service.

On the surface Fattmerchant’s 0% + $0.05 markup may appear cheaper than a markup of 0.10% + $0.06. 0% is lower than 0.10%, and 5 cents is lower than 6 cents. But the specifics of your business’s sales volume and number of transactions will affect the actual amount you’ll pay. It’s also extremely important to remember to factor in monthly costs, which are generally much higher with a 0% flat rate processor.

For example, let’s say a business that processes $25,000 a month with an average sale of $50 (500 transactions per month) signs up for Fattmerchant’s $99 and $0.05 pricing plan. That would result in a markup paid to Fattmerchant of $124 (500 * $0.05 + $99).

Competitive interchange-plus pricing of $10 a month, 0.10%, and $0.06 per transaction for the same business would result in a markup paid to the processor of only $65 (500 * $0.06 + $10) + (25000 * 0.001.) The markup resulting from the percentage-based interchange-plus pricing is half of Fattmerchant’s subscription-based markup!

It can be even more expensive with Fattmerchant’s higher per-transaction fee options. The online plan would cost the same business $154 (500 * $0.15 + $79.)

CardFellow clients routinely see some of the most competitive quotes available, and you can use our software to easily compare quotes from anyone. Our software does the math so you can see how Fattmerchant’s flat rate pricing stacks up against any other processors’ pricing in an apples-to-apples format.

Best of all, our software provides quotes specific to your business. It’s not a superficial savings calculator that produces unhelpful general results. You can input your business’ specific information to create a comprehensive cost estimate that itemizes interchange and assessment costs along with the processor’s markup, no matter what they call it.

It only takes a minute to create a free profile and see real numbers, and your contact info stays private so you won’t get annoying sales calls.

Here’s why you need to see how Fattmerchant stacks up using CardFellow’s free comparison service:

  • Our software shows you when a flat rate is more expensive than a percentage-based markup.
    Don’t make the expensive mistake of assuming a percentage is always more expensive than a flat fee. It’s all in the numbers, as our free comparison service will easily show you.
  • You’ll see how processors’ markups compare without any sales speak.
    CardFellow’s software itemizes every processor’s markup for you. This allows you to compare offers side-by-side to see how things stack up, regardless of whether the processor is making its money from a flat fee, or as a percentage of sales. Whatever the processor calls its markup, we’ll include it in your cost comparisons.
  • You’ll get complete transparency no matter what pricing model is used.
    CardFellow’s service saves you the headache of trying to estimate costs by presenting quotes in a way that makes them equally transparent for all processor pricing models.Our software gives you a complete breakdown of interchange rates commonly associated with your individual business type and provides a detailed breakdown of assessment charges. With these wholesale costs separated, you can also easily compare the true markup for each processor.

CardFellow puts the power back in your hands with free comparison tools. Finding the most competitive processor doesn’t have to be so tough. Watch our video below to see how you can cut through the marketing to find the most competitive pricing for your business.

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