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Card acceptance costs can represent a significant item in a business's operations. However, choosing the right pricing model is not a simple task – it depends on the size of the business, the number of transactions, the average basket value, and many other factors. In this article, we will detail how to choose the optimal solution for you.
If you're just starting your business or your turnover is still uncertain, one of the most important aspects is risk minimization. In such cases, it is worth choosing a provider that does not charge a monthly base fee or fixed costs.
No financial burden without turnover: If you have fewer customers in a month, you don't have to pay fixed fees
Predictable costs: You only pay when you actually generate revenue
Lower entry threshold: You don't need to invest a large amount upfront
It's true that fee-free models often have higher transaction fees (up to 1.5-2% instead of the usual 1-1.2%), but as a starting business, this can still be more favorable than paying fixed amounts monthly even when you barely have turnover.
When your monthly transaction volume and turnover are already stable and predictable, it's worth reevaluating your contract. For a higher-turnover business, a fixed monthly fee model with lower transaction costs may pay off.
If you enter your business turnover data correctly on the POSnavigator website, you can immediately see which model would be more favorable for you, because POSnavigator calculates all expected costs over 4 years for you!
One of the most frequently overlooked factors is the basket size, i.e., the average transaction value. This is particularly important if your provider charges a minimum transaction fee or fixed transaction fee in addition to the percentage fee.
Imagine you run a café where the average purchase value is 800 HUF. Your provider charges 0.9% + 25 HUF fixed fee per transaction.
Cost Element Calculation Amount Percentage fee 800 HUF × 0.9% 7.2 HUF Fixed fee - 25 HUF Total cost 32.2 HUF Actual cost % 32.2 / 800 4.03%
As you can see, although the advertised fee is 0.9%, the real cost due to the fixed fee is more than 4%!
Now let's look at the same for an electronics store where the average purchase is 50,000 HUF.
Cost Element Calculation Amount Percentage fee 50,000 HUF × 0.9% 450 HUF Fixed fee - 25 HUF Total cost 475 HUF Actual cost % 475 / 50,000 0.95%
Here the fixed fee barely affects the total cost – the actual fee is almost the same as the advertised 0.9%.
Avoid high fixed or minimum transaction fees with low basket values! Rather choose a provider that calculates purely on a percentage basis, even if it's somewhat higher.
In our previous article, we already detailed how ICC++ (Interchange++) pricing works. Now let's see which model is more advantageous for whom.
With ICC++ pricing, you pay the actual interchange fee plus a fixed provider commission. This model means more predictable revenue for the provider, as they always get their own fixed fee, regardless of what type of card was accepted.
Therefore, providers often set lower own fees in the ICC++ model than in blended pricing.
ICC++ pays off when:
The majority of your customers pay with domestic debit cards
The proportion of premium and business cards is low
Cost transparency is important to you
You want to know exactly where your money goes
With blended pricing, you pay a single, averaged fee for each transaction, regardless of the card type. This can be more advantageous when:
The proportion of credit card payers is high: Credit card interchange fees are significantly higher than debit cards
Many foreign card customers: Foreign cards (especially outside the EEA) can have interchange fees 2-3× higher
Many business or premium cards: These also come with higher interchange fees
If predictability is important: You wouldn't want transaction fees to vary depending on the card type
It may be important that while in uniform (blended) pricing you often only pay a percentage fee, in ICC++ pricing you definitely pay a fixed fee in addition to the percentage fee, so basket size can be a critical factor (see the previous point)
In such cases, the total cost in the ICC++ model can easily exceed the fixed fee of blended pricing due to high interchange fees.
Some providers offer uniform (blended) pricing (i.e., they do not charge interchange and system fees separately), but charge different fees by card type. This is somewhat more transparent than ICC++ pricing, because the fee is predefined for each card type, but in this case the merchant's total cost still largely depends on what cards their customers pay with (which neither the merchant nor the bank has real influence over)
Assess your customers: What cards do they pay with? What percentage is foreign?
Request sample calculations: Most providers are happy to prepare calculations based on your actual transaction data
Try it out: Some providers allow model switching, so you can try which one is better for you
On the POSnavigator website, you can also assess which model would be more favorable for you, because you can see side by side the easily calculable blended pricing and the transparent ICC++ pricing total 4-year cost. On POSnavigator, you can set the proportion of foreign or business cards, basket size, and monthly transaction numbers, so you can see exactly which model would be more favorable for you.
Procuring the terminal required for card acceptance is also an important decision. Both options have their advantages and disadvantages.
Low initial cost: You don't need to pay a large amount at once
Service and replacement: In case of failure, free replacement is usually provided, moreover, providers guarantee replacement equipment within a specified time (usually 24-48 hours)
Technological update: If the terminal becomes obsolete, the provider replaces it with a newer, often more modern one
Flexibility: If your needs change, you can switch more easily
More expensive in the long term: Within 2-3 years, the rental fee may exceed the purchase price
Contractual obligation: Some providers expect a loyalty period
Limited selection: You are limited to the devices offered by the provider (in many cases there is no choice at all)
Cheaper in the long term: One-time cost, then you only pay transaction fees
Freedom: You can switch providers more easily (but check compatibility!)
Own device: The device is yours, you can dispose of it freely
Higher initial investment: The price of a good quality terminal can range between 50,000-150,000 HUF
Service costs: After the warranty period, repairs are your cost
Service interruption: The repair and replacement solution is up to you, and until you can replace the terminal, you cannot accept cards, which means lost revenue
Risk of obsolescence: In 5-7 years, it may no longer meet current requirements
Research terminal offerings: If you don't have special requirements, almost any terminal may be suitable.
As a starting business, choose rental – less risk
For stable, high-turnover businesses, purchase may pay off
For multiple locations, you can also combine both solutions
On POSnavigator, you can also compare the properties of different terminals, making it easier for you to decide.
Some providers require you to open a business account with them, while others are satisfied with specifying an existing bank account to which the provider settles transactions daily. The account opening requirement increases banking costs, so it's worth considering this in your decision.
Obviously, it's worth examining your current account bank's offerings, because even if your bank doesn't offer the most favorable payment service, you might still come out better overall due to account management and other banking costs.
POSnavigator does not calculate related bank account costs, as this is an otherwise existing cost for the business. However, during the search, it can be set to only show providers that do not require an account opening obligation, thus avoiding unnecessary costs. You can also set your own account bank, in which case you can compare your own bank's offer with alternative payment service providers.
Ask how often they transfer money to your account. Typically, this happens within 24-48 hours. Daily settlement is more advantageous from a liquidity perspective. Several providers already offer near-instant settlement, meaning transaction credits happen within minutes.
Pay attention to the fine print:
Is there a PCI DSS compliance fee?
Do they charge a statement fee (statement fee)?
Is there an inactivity fee if you don't use the terminal?
Are there fees related to chargebacks? If your service has a higher chance of chargebacks occurring, it may be worth choosing a provider that does not charge a separate fee for it.
If you also have an online webshop or want to connect the terminal to a cash register, check compatibility and integration costs. These development costs can be significant.
In general, every payment service provider can be integrated with any IT system, but if the IT system already has a payment service provider integration, it's worth using that, as it reduces development costs.
On POSnavigator, you can set which IT service providers you use (e.g., from whom you rent a webshop), and during the search, you can only look for providers that support these.
In case of a failure or problem, it's critical that you can reach the provider quickly. It's worth checking reviews and support availability.
Aspect Recommendation Starting business Fee-free model, higher transaction fee acceptable Low basket value Avoid high fixed/minimum fees Mainly domestic debit cards ICC++ pricing may be more advantageous Many foreign/credit cards Blended pricing is safer Uncertain turnover Terminal rental recommended Stable, high turnover Terminal purchase may pay off
The most important advice: don't just look at the advertised fees, but calculate your actual costs based on your own turnover. And if you're uncertain, ask for multiple quotes and compare them!
You can read more about calculating card acceptance costs and the details of ICC++ pricing in our previous articles.
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