Interchange-Plus Pricing
A transparent pricing model showing actual interchange costs plus a fixed processor markup.
What is Interchange-Plus Pricing?
Interchange-plus pricing (also called cost-plus) is a payment processing pricing model where you pay the actual interchange fee set by card networks plus a fixed markup from your processor. For example, "interchange + 0.20% + $0.10" means you pay true interchange plus twenty basis points plus ten cents per transaction. This contrasts with tiered or flat-rate pricing where the processor bundles costs into opaque categories. Interchange-plus provides complete transparency into what the networks charge versus what your processor adds.
Why It Matters
Interchange-plus is widely considered the fairest pricing model for merchants. You see exactly what you're paying and can verify the processor isn't inflating interchange. It also means you benefit when transactions qualify for lower interchange categories. For most businesses processing over $10,000 monthly, interchange-plus is more cost-effective than flat-rate pricing.
Related Terms
Interchange Fee
The fee paid by the merchant's bank to the cardholder's bank on every card transaction.
Payment Processor
A company that handles credit card and debit card transactions between merchants and banks.
Merchant Account
A bank account that allows businesses to accept credit and debit card payments.
Interchange Optimization
Strategies and technologies to qualify transactions for the lowest possible interchange rates.
Frequently Asked Questions
Flat-rate (e.g., 2.9% + $0.30) is simpler but often more expensive. Interchange-plus lets you pay true wholesale cost plus a small markup, which usually saves money as volume grows.
Competitive markups range from 0.10% + $0.05 for large merchants to 0.30% + $0.10 for smaller ones. Focus on the markup, not the total rate, since interchange is fixed.
Tiered pricing bundles transactions into qualified/mid-qualified/non-qualified buckets, letting processors add hidden margin. It benefits the processor, not the merchant.
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