What defines Tiered pricing?

Tiered pricing is characterized by the existence of multiple levels or tiers that determine the price of transactions based on specific criteria, such as transaction volume or transaction type. This model allows merchants to pay different rates depending on the tier they fall into, which can be based on the number of transactions processed, the total dollar volume, or other relevant factors.

For instance, a merchant processing a higher volume of transactions may qualify for a lower rate per transaction, effectively making it a variable pricing strategy tailored to the specifics of each merchant's performance. This approach not only incentivizes higher transaction volumes but also provides flexibility in pricing based on individual business activities.

The other options do not accurately capture the essence of tiered pricing. A single pricing model for all transactions suggests a uniform approach that does not align with tiered pricing's variable nature. A discount pricing model for high-volume merchants, while potentially related, is more specific and does not encompass the broader concept of multiple tiers for all types of transactions. Similarly, a flat rate regardless of the transaction type fails to reflect the variability and complexity that tiered pricing entails.