TransFreedom flat fee credit card processing rate review

It’s nice for budgeting, but is it a good deal? TransFreedom by TransFirst offers merchants a simple way to budget credit card processing expenses by offering a flat monthly fee for everything. It’s the same rate as long as merchants do not exceed their monthly tier.

Prelude: All credit and debit cards have associated interchange fees. How the merchant pays for them varies widely. The processor can bundle all the fees and keep the difference between actual cost and the bundled rate sold for. Or the processor can ‘pass through’ all the fees and add a merchant discount on top. Bundled rates:

  • The payment processor is obligated to pay interchange fees, regardless of what your price plan looks like.
  • The processor uses industry experience to calculate what the average effective rate is (sum of all fees divided by net business volume) for different types of business (professional services, hair salon, manufacturer, etc) and payment acceptance methods (online, retail etc).
  • The processor offers you a bundled rate they are reasonably sure you will exceed, typically adding a nice cushion on top just to be safe.

TransFreedom One Price Plan Pros:

  • Merchants can budget for fees as a monthly operating expense
  • Includes the TransFirst Gateway
  • Includes data breach security protection policy
  • Merchants don’t need to learn anything about interchange or qualifying transactions for better rates.
  • Addresses an issue for small businesses with low volume: eliminating the need to understand complex credit card procssing fees.

TransFreedom One Price Plan Cons:

  • Merchants pay for volume even if they don’t use it, causing a wide swing in the effective rate:
    • $15,000 for $449= 2.99%.
    • $11,000 for $449= 4.08%
    • Rarely do merchants have the same volume month to month.
  • Restrictions do apply, but they are not listed for public viewing. Most likely international card surcharge fees will apply. Also, since the effective rates vary widely by industry, if you’re in a higher fee industry (business to business) rates may be higher.

Blog Author Speedy says:

  • Comparing apples to apples for a specific tier revenue amount, a merchant could conceivably save with Transfreedom. It all depends on the merchant deal. Regardless, since a merchant pays for unused volume, or 4% for going over the volume, this plan is not for merchants counting pennies.
  • Choose this plan if you want a fixed price, lowest cost is not an objective, and you’re comfortable with the 3-year term that is standard for Transfirst merchant agreements. Additionally, be sure to read the fine print about ‘restrictions’ before committing.
  • One of the biggest problems for businesses is ‘qualifying’ for lower interchange rates. Rather than change processors, merchants can fix the problem with CenPOS the industry’s only intelligent payment gateway- universally works with all credit card processors, for retail, MOTO, mobile, online etc. to qualify ALL transactions at the lowest rates possible. Contact Christine Speedy for more information.

DISCLAIMER: This review uses publicly available information posted on the TransFreedom web site as of 5/25/2012. The review does not include the processor, just the price plan.

MasterCard Processing Integrity fee update

Effective November 1st 2011, the MasterCard Processing Integrity fee will increase by $0.01 to an amount of $0.055. Unless your merchant account is on a special type of bundled pricing, all merchants will see this on their November 2011 merchant statement, delivered in early December.

WHAT IS THE FEE FOR? This fee is applied to authorized transactions that are not followed by a matching MasterCard cleared (settled) transaction (or in the case of a canceled transaction, not properly reversed). The fee can be avoided by clearing (settling) your transactions. If an authorization is not needed, the authorization must be electronically reversed within 24 hours for face to face authorizations and reversed within 72 hours for Card absent authorizations.

WHO PAYS IT? All merchants pay the fee if triggered by the fee rule.

HOW WILL I KNOW IF I RECEIVE THE CHARGE? All merchants on “interchange pass through” or “interchange plus” pricing will see these charges listed as a separate line item, when the fee applies. If you are not on this type of pricing, then it’s up to the processor how your fees are bundled, though in most cases, I think merchants will see this fee regardless of the type of pricing.

HOW CAN I CANCEL OR REVERSE AN AUTHORIZATION AND AVOID THE FEE? This varies by many factors, including how you are processing.

  • Yahoo stores now have a Reverse Authorization button on the Order Details page.
  • has issued an API. Shopping cart engines are integrating the API, but it is not yet widespread.
  • Check with your processor or POS software provider.

Can you give me an example of when this fee would be applied? An ecommerce store receives an order for an item. The item is backordered and will be back in stock in 3 weeks. The merchant does not want to cancel the order and does nothing. The authorization will be automatically dropped because it exceeds the 7 calendar day maximum. The merchant will also incur the MasterCard Processing Integrity fee.

The fee does NOT apply to:

MCCs 3351-3441 (Car Rental Agencies)
MCCs 3501-3999 (Lodging-Hotels, Motels, Resorts)
MCC 4411 (Cruise Lines)
MCC 7011 (Lodging-Hotels, Motels, Resorts –not elsewhere classified)
MCC 7512 (Car Rental Agencies – not elsewhere classified)

NOTE: The penalty for failure to reverse authorization is $.055 but the merchant per transaction fee is likely even higher. Unfortunately merchants will be hit with two fees in order to reverse an authorization for the benefit of the customer. Here’s a better idea to improve consumer satisfaction. Why not require card issuing banks to fund  consumer accounts faster when merchants issue refunds?  The money comes out of the merchant account per the merchant termsn, usually upon settlement, but the consumer doesn’t see there money usually for 3-5 days, sometimes longer.

The Merchant Solutions review

The Merchant Solutions review examines web site advertised credit card processing offers. Every so often I see ads that I know are too good to be true. In your heart you know it too, but that doesn’t stop you from at least looking right?

I stumbled upon this site because it was at the top of google when I was searching for something and it caught my eye. This review lays out facts based on direct observations. I hope this helps you in evaluating any company for merchant services. Draw your own conclusions.


  • 1.59% + 0.15 per transaction
  • FREE Payment Gateway Software/Terminal
  • FREE Gateway Access
  • No set up, application fee or annual fee

ACTUAL OFFER (based on standard industry card not present):

Gateway – choose from, $149 application fee, or PC Charge Pro, $249 application fee; both carry a $10 per month fee.

AUTHORS Comments: The home page says “free payment gateway terminal”. That’s true, the terminal is free, but the gateway is not. I knew that, but it’s a trick question. Are gateway fees negotiable? While the fees may vary, and PC Charge are never free. They are for-profit businesses. The only way you can get them for free is if you are being charged somewhere else for it to make up the hard costs. I’ve never seen that happen and you should beware if offered. Whenever a cost is bundled, you can bet you’re going to pay extra for built in profit margin. END COMMENTS.

The actual offer continued.

Credit card processing

  • 2.19% + 0.27 per transaction
  • $10 per month statement fee
  • No set up, application fee or annual fee
  • CROSS BORDER FEES will be added and listed separately

The rest of the costs are found in the fine print: If you are a Direct Mail/Telephone Order Merchant (non-magnetic swipe read transactions) and each transaction you submit meets all of the following requirements will be priced at the rate quoted. Any other transaction, including all foreign transactions and commercial card transactions in addition to transactions using Visa Rewards Card, Visa Signature Card, Visa Infinite Card, and MasterCard World Card, will be priced at the rate quoted plus 1.14%.


  • Obtain an electronic authorization and settle for authorized amounts (one reversal permitted on Visa transactions to make authorization amount equal to settle amount).
  • Address Verification Request in authorization on cardholder billing address.
  • Purchase date (settled date) is ship date.
  • Send order number with each transaction.
  • Settle and transmit batches same day via your terminal/electronic system.
  • Send level 3 data (line item detail, sales tax, customer code) with every eligible commercial card transaction. NOTE: Card Not Present transactions involving one-time, recurring, or installment bill payment transactions are subject to additional card association requirements which must be complied with to avoid NQS. Electronic commerce transaction requirements are also subject to additional card association requirements which must be complied with to avoid NQS. Please refer to Card Acceptance Guide for additional requirements.

AUTHORS Comments:

  • There is no explanation as to why no transactions will process at the home page ad rate of 1.59% and $.15. However, Visa debit interchange for card not present is 1.60% + $0.15 as of April 2010. This does not include network fees incurred by processors or any profit margin. The home page advertisement would lose money for the company on every transaction, unless offset by other fees.
  • A monthly statement fee is also a hard cost, so is not unexpected.
  • Cross border fees are hard costs and it appears they are being passed through with no mark-up, which is good.
  • Which transactions will qualify at 2.14% and which at 2.14% plus 1.14%, or 3.28%? First of all, does your business model meet the requirements listed? If you authorize on one day, but capture/settle on a future date, the transaction would not qualify. You may not be aware of it, but data captured does not always equal data passed on to the processor. For example, does not support level 3 data. I was unable to confirm if PC Charge does at this writing. At the other end, the processor also needs to accept the level 3 data from the gateway. Verify this with your processor. Statistically, about 50% of all consumer transactions are now with debit cards, so if you met the requirements above, and have a consumer oriented business, about half of your transactions would qualify at 2.19%. The majority of credit cards today are some type of rewards cards;  rewards cards rate is 3.28% in the above offer.
  • The Merchant Solutions (TMS) is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA” is on the home page and all web pages. I like to know more about companies I might do business with so I always research the entity.  Here’s what I found:
  1. The wording on the application changed to “The Merchant Solutions (MSC) is a registered ISO/MSP of HSBC Bank, USA, National Association, Buffalo, NY”. Note both the company abbreviation and the associated bank name have changed.
  2. The agreement terms and conditions are with Global Payments Direct, Inc. There is no mention of The Merchant Solutions (TMS).
  3. I found no listing with the state of California for The Merchant Solutions under multiple name variations I searched for.
  4. I performed a reverse phone number check at and got no results.
  5. I performed various address check versions at and couldn’t find a company with any similar name at the address.
  6. I searched and didn’t find the company listed.
  7. The online application does not use SSL technology (no https or lock symbol)  for taking your private data, including bank account and social security information. This is a significant security risk.
  8. The application terms have significant penalties for early termination on the 3 year agreement. “… all monthly fees assessed to Merchant under this Card Services Agreement and due for the remainder of the then existing term of the Card Services Agreement, including all minimum monthly fee commitments, shall be immediately due and payable”.


I’ve pointed out a few ways you can perform basic checks on a company for any service you find online, as well as reading between the lines for a merchant offer. Merchant services in particular involves highly confidential and sensitive information. Before sharing your private data, check out the company.  The sources mentioned in this article don’t measure company reliability.

For the record, you can verify 3D Merchant Services here: Registered Corporation, state of Florida,,