If you are sending in a string, then you should be able to recover a string in the receiving service.
To do this quickly to see if this is your problem, map the input to the receiving service to the message input string in pub.file:debugLog.
This should write your input to the server.log for you to view.
On the pub.client:http input, you need to make sure that you are mapping the flat file data into the following field:
/data/arg/NameOfInputVariableOfReceivingFlow
You should leave the encoding blank and not set it. Otherwise, Mike Zhou is correct. The setting that you have is more useful for the file polling port.
See if this helps.
Ray
#webMethods#Flow-and-Java-services#Integration-Server-and-ESB