A Bundled Rate is a distinctive pricing model adopted by payment processors. It amalgamates different cost components, such as interchange rates, assessment fees, and the processor’s markup, into a single, composite rate applied to the merchant.
This bundled rate typically represents a percentage of the transaction’s total value, supplemented by a fixed per-transaction fee. On the surface, the bundled pricing model offers simplicity and a degree of predictability in cost calculation for merchants.
However, this simplicity comes at the expense of transparency. The bundled rate can make it challenging for merchants to understand the specific breakdown of costs and the value they are receiving for each component.
This opacity can complicate the process of comparing rates among different processors, thereby making it harder for merchants to make informed decisions about their payment processing solutions. It underscores the need for a balanced approach that combines simplicity with transparency.