FlatPay Disrupts POS Pricing With Flat Rate Model for Merchants

Paul Allen

17 Nov 2025 • 7 min read

Small merchants typically face complex and high fees using traditional payment systems. FlatPay, a Danish fintech startup, just hit unicorn status in November 2025 by charging a flat transaction rate through its card terminals and point-of-sale systems. But the real move is about redefining pricing constraints in merchant payments to shift power from big players to small businesses.

This changes how payment processing economics work for merchants who often struggle with opaque and variable fees. Operators in fintech and retail technology should watch how simplifying pricing unlocks customer acquisition and operational scaling in fragmented markets.

FlatPay’s Pricing Breakthrough: Flattening Complexity for Merchants

FlatPay offers a flat transaction fee model for its physical card terminals and POS systems, contrasting the industry standard of percentage-based or tiered fees that scale unpredictably with sales volume. This is a deliberate positioning strategy to attract small merchants who see traditional providers as costly and opaque.

FlatPay’s flat rate cuts through a longstanding constraint in merchant onboarding: unpredictable costs cause reluctance to switch and reduce merchant lifetime value. By locking fees, FlatPay shifts the constraint from cost uncertainty to transaction volume expansion.

This mirrors the strategic moves seen in Shopify’s SEO system, where lowering entry barriers triggered exponential growth. FlatPay does this through its hardware-software bundle, ensuring the pricing model isn't margin-leaky while making merchant budgeting straightforward.

Why Flat Fees Change the Payment Processing Game

Most competitors, including giants like Square and SumUp, rely on variable percentage fees around 1.5%-3% per transaction plus fixed fees. For a merchant processing $10,000 a month, this can mean wide fluctuations versus FlatPay’s consistent rate, enabling better cash flow forecasting and risk management.

This shift turns the payment pricing constraint from a cost-variable problem into a pricing certainty problem, unlocking growth channels previously clogged by churn due to billing surprises. FlatPay converts what was a friction point into a competitive advantage that scales with increasing transaction volume rather than chokes it.

For example, a café using FlatPay terminals avoids the 2.75% + $0.30 per swipe fees typical in the U.S., paying a flat rate regardless of sale size. This simplicity increases merchant stickiness.

Effectively, FlatPay flips the operational challenge — from dealing with unpredictable and complex cost structures to focusing on volume and customer acquisition, a more scalable lever for fintech growth.

Strategic Advantage Over Established Players

FlatPay leverages a hardware integration that bundles cost certainty with the POS system, unlike software-only models vulnerable to third-party fee layers. By vertically integrating their terminals with software, they remove fee arbitrage and pass the benefit directly to small merchants.

This tackles an overlooked system-level bottleneck: end-to-end pricing transparency. Competing platforms often layer fees unpredictably due to payment networks, banks, and processors involvement.

FlatPay’s constraint break resembles how fintech founders navigate growth lulls by redefining funding constraints: they remove cost complexity upfront, unlocking natural scaling without heavy subsidies or opaque incentives.

Such integration also primes FlatPay for automated upsell and loyalty system embeds, making their terminals a persistent distribution point rather than just transaction machines.

What Operators Should Watch Going Forward

FlatPay has raised its unicorn valuation on the bet that flat-rate pricing becomes the new norm for smaller merchants uneasy with established pricing models. This advantage compounds as product adoption grows, locking in usage through a clear value proposition and simple billing.

Merchant acquisition no longer hinges on competing to offer the lowest per-transaction fee but on delivering pricing certainty combined with POS reliability and automation capabilities.

This changes the standard playbook for POS and payment providers, pushing the market constraint from price competition into service differentiation and ecosystem building — where FlatPay’s scale and integration become harder to replicate.

Operators building fintech or retail systems can learn from FlatPay’s positioning: simplify core economics for end users and turn historically negative constraints into levers for acquisition and retention. This moves beyond usual margin-pressure battles into new growth territory.

If you're looking to simplify and optimize payment processing like FlatPay’s innovative flat-rate model, platforms like Bolt Business provide fast, reliable checkout and payment gateway solutions tailored for ecommerce and retail. This is exactly why Bolt Business has become essential for merchants aiming to streamline transactions and improve customer experience through seamless payment integration. Learn more about Bolt Business →

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Frequently Asked Questions

What is a flat transaction fee model in payment processing?

A flat transaction fee model charges merchants a fixed fee per transaction regardless of the sale amount, unlike traditional percentage-based fees. For example, FlatPay offers a flat rate that simplifies budgeting and reduces cost unpredictability for small merchants.

How do flat fees benefit small merchants compared to percentage-based fees?

Flat fees provide cost certainty and predictable expenses, which help small merchants manage cash flow better. Unlike typical percentage fees around 1.5%-3%, merchants paying a flat rate avoid fluctuating costs that vary with sales volume, supporting easier financial planning.

Why is pricing transparency important in payment processing?

Pricing transparency helps merchants understand their costs upfront and avoid surprises from layered fees involving payment networks, banks, and processors. FlatPay achieves this by vertically integrating hardware and software, eliminating hidden fees and enabling clear, upfront pricing.

How can flat-rate pricing impact merchant acquisition and retention?

Flat-rate pricing lowers entry barriers by removing unpredictable costs, encouraging more merchants to switch providers. This pricing certainty increases merchant stickiness by reducing churn caused by unexpected billing fluctuations, fostering long-term growth.

What are the challenges with traditional payment processing fees?

Traditional payment systems often charge variable percentage fees plus fixed fees, which create unpredictable costs that deter small merchants from switching providers. These fluctuating fees complicate cash flow management and reduce merchant lifetime value.

How does FlatPay's hardware-software integration create a competitive advantage?

FlatPay bundles its flat transaction fee with physical card terminals and POS software, eliminating third-party fee arbitrage. This vertical integration ensures cost certainty and enables features like automated upsell and loyalty programs, enhancing merchant value.

What effect does flat-rate pricing have on merchant cash flow forecasting?

Flat-rate pricing makes cash flow forecasting more accurate by providing consistent transaction costs regardless of sales volume. For instance, a café paying FlatPay’s flat rate avoids the typical 2.75% plus $0.30 per swipe fees, stabilizing monthly expenses.

Why might flat-rate pricing become the new norm for smaller merchants?

Smaller merchants prefer flat-rate pricing because it removes cost complexity and makes budgeting straightforward, which is critical for scaling operations. FlatPay’s unicorn valuation reflects confidence that flat fees address long-standing pain points for small businesses.