What is Direct Cost Billing in the context of payment processing?

Direct Cost Billing refers specifically to a pricing structure in the payment processing industry where transaction costs are charged based on the actual costs incurred for processing each transaction, often without any additional markup or bundled fees. This model aligns with the concept of Unbundled Rates, where each element of the payment processing service (such as transaction fees, monthly fees, and other ancillary costs) is billed separately, allowing merchants to see the exact costs associated with each service they utilize.

By using Unbundled Rates, businesses can gain clarity on their expenses and make more informed decisions about the payment processing options that are most cost-effective for them. This transparency can help merchants manage their overall payment processing costs more effectively, as they can identify and understand each fee on their invoice, including transaction fees linked to Direct Cost Billing.