What Does 'Less Discount Paid' Mean on Your CCP Statement?

Less discount paid doesn't refer to a coupon from your payment service provider. Understand the meaning of this term on your credit card transaction statement.

When the billing statement from your payment service provider says "less discount paid," does that mean you're getting a special deal? Not exactly. 

While a discount usually refers to a percentage off your bill, credit card processing companies use this term to refer to fees you've already paid. This guide provides details about the "less discount paid" notation and answers common questions about payment pricing models for credit card transactions.


What Does 'Less Discount Paid' Mean?

The 'Less Discount Paid' notation on your payment processing statement refers to fees you've already paid. It's a credit applied to the total balance, reducing the amount you owe overall. Unlike the typical use of the term ‘discount,’ it doesn't mean the provider subtracted a percentage from your bill for promotional reasons.

Daily Discount vs. Monthly Discount

Some payment service providers charge their per-transaction fee before they deposit the funds into your small business account, a pay structure called daily discount. At the end of the month, you'll receive a bill for miscellaneous charges, including but not limited to non-qualified rates, mid rates, and transaction fees. The 'Less Discount Paid' label calls out fees you've already paid; it's not actually a discount, which explains some of the confusion around the term.

Daily discount has some downsides. This arrangement usually costs more than other pricing structures. It also counts credit card sales as net rather than gross deposits, which lowers your available cash flow.

What Are The Different Pricing Models Credit Card Processors Use?

Your credit card processor may use one of three common pricing models.

Flat-Rate Pricing

Flat rate pricing offers the most simple, affordable payment processing model for your small business. You'll pay the same fee for every transaction, so your bill will be transparent and easy to understand. 

When you use Pay.com as your payment service provider, you’ll get access to a Pay Dashboard where you can view everything on one intuitive platform. We charge flat rates, so you'll know what to expect from every billing cycle.

Tiered Pricing

Tiered pricing structures charge a different issuer fee for each credit card provider. Your rate changes for every transaction depending on the card your customer uses. You'll see the designations non-qualified (nqual), mid-qualified (mqual), and qualified (qual) on your bill to indicate the three pricing tiers. 

Although tiered pricing is the most common model, it's also the most expensive for businesses. You may notice unexplained charges on your bill and difficult-to-understand statements. 

Interchange Plus / Pass-Through Pricing

Providers that use pass-through plus or interchange plus pricing charge a set rate over the credit card company's established interchange rate. While the fee doesn't vary by card issuer, it may change based on the type of company you run or the volume of sales processed. However, even the most expensive interchange plus fees tend to be lower than tiered pricing costs. 

It's easy to identify interchange plus pricing since it typically involves a detailed, itemized bill. You'll also notice a single flat discount rate.

The Benefits of Using Pay.com as Your Payment Service Provider

Pay.com takes pride in transparency. We make sure you understand your statement and charge a single flat rate for each transaction, eliminating stress over surprise fees. Other benefits of partnering with Pay.com include:

Click here to create your Pay.com account now!

The Bottom Line 

Credit card processing statements can be complicated, especially when your provider uses a tiered pricing model with daily discounts. In this situation, you may see a "less discount paid" note on your monthly bill. This term indicates a credit you're receiving for the daily transaction fees you've already paid.

You can eliminate unnecessary fees and reduce the expense of credit card processing by using Pay.com as your payment service provider. Our pricing model is based on a single per-transaction fee, with completely transparent real-time tracking through our Pay Dashboard


What's the best way to accept credit card payments?

You can save time and money by choosing an all-in-one payment service provider that offers flat-rate pricing for a comprehensive range and services. Pay.com lets you open an account in just a few minutes and accept multiple methods of payment. You don't even need a website to engage in secure e-commerce when you rely on our trustworthy tools.

What is 'discount paid'?

Credit card processors define discount paid as the amount they've already charged in daily fees. They credit this paid portion of your charges on your monthly billing statement as "less discount paid." You'll see this on your statement if your processor uses a daily discount payment model. Monthly discount models charge all fees in one single statement and tend to cost less.

What is a discount in credit card processing?

Discount doesn't mean you get a percentage off your bill in credit card processing. Instead, it refers to a credit for fees you've already paid. You'll probably see the term "discount paid" on your bill if your processor charges both daily and monthly or quarterly fees.

Is there a way to avoid paying credit card processing fees?

You can reduce or even eliminate the amount you pay in credit card processing fees by choosing a provider with a flat-fee payment model. Pay.com gives you a transparent billing system with the same rate for every credit card transaction. You can see each charge as it occurs on your convenient Pay Dashboard.

Meet the author
Andrea Miller
Andrea Miller has been a writer and editor for more than two decades. Specializing in business and finance, she has written for some of the major websites in the financial sector. Outside of work, she spends most of her time with her family and enjoys hiking, yoga, and reading.
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