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By ActivityPay
You're losing money on payment processing fees, but you probably can't pinpoint exactly how much.
Most adventure tourism operators I talk with can tell you their "rate"—maybe 2.9% plus 30 cents, or a flat 3.5%. But when I ask how much they actually paid last month per transaction, or why their effective rate jumped from 3.2% to 4.1% during peak season, I get silence.
This isn't your fault. The payment processing industry thrives on confusion. But for seasonal businesses like yours—where 80% of revenue hits in four months and average transaction sizes swing wildly between $75 kayak rentals and $3,500 multi-day expedition deposits—the pricing model you choose directly impacts your bottom line by thousands of dollars annually.
Two pricing structures dominate the market: interchange-plus and flat-rate. Let's break down exactly how each one works, what you're actually paying, and which model makes financial sense for different types of adventure operations.
Interchange-plus pricing breaks your processing costs into three transparent parts:
Interchange fees go directly to the card-issuing banks (Chase, Bank of America, etc.). These rates are set by Visa and Mastercard, published publicly, and identical for every processor. A rewards credit card costs more to process than a basic debit card—that's interchange.
Assessment fees go to the card networks (Visa, Mastercard). Also non-negotiable and publicly published.
Processor markup is what your payment processor charges for their service. This is the only negotiable part, and it's quoted as a percentage plus a per-transaction fee (like 0.30% + $0.10).
Here's a real example: A customer books a $1,200 whitewater rafting trip using a Visa rewards card.
The next day, someone books a $1,200 trip using a basic debit card:
Same transaction amount, different card type, $10 difference in cost. With interchange-plus, you see this breakdown on every statement. You know exactly what you're paying and why.
Interchange-plus pricing shines for seasonal operations because you only pay the processor markup on actual transactions. During your off-season when bookings drop to near-zero, you're not locked into minimum monthly fees or paying for volume you're not processing.
If you process $450,000 in July and $8,000 in January, your processor markup stays consistent. The percentage doesn't change based on volume, and you're not subsidizing slower months with inflated rates during peak season.
Flat-rate pricing bundles everything into one simple rate: typically 2.9% + $0.30 for card-present transactions, or 3.5% + $0.15 for online bookings.
Using our same $1,200 rafting trip example:
Simple math. Same rate regardless of whether they use a premium rewards card or a basic debit card. The processor absorbs the interchange variation, and you get predictability.
Flat-rate sounds appealing because it eliminates complexity. You know your cost per transaction without analyzing card types or interchange categories. For many businesses, this simplicity is worth paying a premium.
The problem for adventure tourism operators: your transaction patterns make flat-rate pricing significantly more expensive than it needs to be.
Consider your typical booking mix. You're processing:
At 2.9% + $0.30 flat-rate, that $2,500 deposit costs you $72.80 in processing fees. Under interchange-plus (using the same 0.30% + $0.10 markup), the actual cost would be around $52.35—a $20.45 difference on one transaction.
Process 200 of these larger bookings during peak season? You've overpaid by over $4,000 compared to interchange-plus pricing.
The math gets worse as transaction sizes increase. Flat-rate processors price their "one size fits all" rate to cover their worst-case scenario (premium rewards cards with high interchange). But studies show roughly 60% of consumer transactions use lower-cost card types. You're paying the premium rate on every transaction, even though more than half cost significantly less to process.
Your average transaction exceeds $400. The larger your typical booking, the more you save with interchange-plus. A $1,500 multi-day tour booking could cost $15-20 less per transaction compared to flat-rate.
You process more than $30,000 monthly during peak season. At higher volumes, even small percentage differences compound into significant savings. An operation processing $600,000 annually might save $8,000-12,000 with interchange-plus versus flat-rate.
You want transparency and control. You can see exactly what you're paying, identify trends (like noticing an uptick in premium cards during certain booking periods), and negotiate your processor markup as your business grows.
Your operation is seasonal with dramatic revenue swings. You're not locked into minimum fees or inflated rates to compensate for off-season processing. Your costs scale naturally with your business rhythm.
Your average transaction is under $200. For bike rentals, single-person kayak tours, or small retail sales, flat-rate's simplicity often outweighs the cost difference. The math just doesn't swing as dramatically on smaller transactions.
You're processing under $20,000 monthly. At lower volumes, the administrative simplicity of flat-rate pricing might be worth a small premium. You're not leaving enough money on the table to justify the added complexity.
You want zero surprises. Every transaction costs the same percentage. Your pricing is completely predictable, which helps with financial forecasting if you prefer consistency over optimization.
You're just starting out. Brand-new operations with limited transaction history might find it easier to launch with flat-rate pricing, then switch to interchange-plus once you understand your booking patterns and transaction mix.
Don't guess—calculate your actual costs under both models.
Pull your last three months of processing statements. Add up your total volume and count your transactions. Calculate your average transaction size. If you're currently on flat-rate, multiply your volume by a typical interchange-plus markup (0.30% + $0.10 is reasonable for established operations), then add estimated interchange fees (roughly 1.7% average for most adventure tourism transaction mixes).
Compare that to what you're currently paying. The difference is your annual overpayment.
If you're on interchange-plus already, look at your effective rate during peak season versus off-season. If your processor markup is higher than 0.40%, you're likely overpaying relative to market rates for established adventure tourism businesses.
Pricing model is just one part of your total processing costs. Watch for:
Monthly minimum fees that hurt during off-season. Some processors charge $25-50 monthly minimums regardless of volume—that's $150-300 annually during your slowest months when you might process nothing.
Batch fees and statement fees that add $10-20 monthly in hidden costs.
Rolling reserves that hold 5-10% of your revenue for 6 months. For a seasonal business processing $400,000 in four months, a 10% rolling reserve means $40,000 of your capital is locked up when you need it most for equipment maintenance and off-season marketing.
Chargeback fees that range from $15-100 per dispute, regardless of outcome. Adventure tourism operations face higher chargeback rates due to weather cancellations and expectation mismatches—a processor that understands your industry will help you prevent disputes rather than just charging you when they happen.
The right pricing model saves you thousands annually, but the right processor partnership—one that understands seasonal cash flow, offers faster funding during peak season, and provides chargeback management built for activity businesses—transforms your entire payment operation from administrative burden into competitive advantage.
Start with the pricing model that fits your transaction profile, then build from there.
Interchange-plus breaks costs into three transparent parts (interchange fees, assessment fees, and processor markup) that vary by card type, while flat-rate charges one consistent percentage regardless of card type. Interchange-plus typically costs less for larger transactions but requires understanding the breakdown, whereas flat-rate offers simplicity with predictable costs.
Interchange-plus pricing is typically better for seasonal operators processing transactions over $400 and more than $30,000 monthly during peak season. This model can save $8,000-12,000 annually for operations processing $600,000 yearly, and costs scale naturally with seasonal revenue fluctuations without minimum fees penalizing slow months.
Flat-rate works best for operations with average transactions under $200, monthly processing under $20,000, or businesses just starting out. The simplicity and predictability outweigh cost savings at these lower volumes, and the percentage difference on smaller transactions is less significant.
For a $2,500 booking, you could save about $20 per transaction with interchange-plus versus flat-rate (2.9%). Processing 200 larger bookings during peak season could result in over $4,000 in savings, with annual savings of $8,000-12,000 possible for operations processing $600,000 yearly.
Key hidden costs include monthly minimum fees ($25-50 that hurt during off-season), batch and statement fees ($10-20 monthly), rolling reserves (holding 5-10% of revenue for 6 months), and chargeback fees ($15-100 per dispute). These fees can add hundreds to thousands in annual costs beyond your advertised processing rate.