Interchange‑plus pricing, and how to compare it honestly.

The structure

Every card transaction has a floor cost made of two parts: interchange, which goes to the bank that issued your customer’s card, and assessments, which go to Visa, Mastercard, Discover or Amex. Those are published, identical for every processor, and not discountable by anyone.

Interchange-plus means your processor passes that floor through at cost, shows it to you, and adds a single stated markup — typically a percentage plus a few cents per transaction. Your statement then reads: here is what the networks charged, here is what we charged, here is the total.

The other two common models bundle the floor into the price:

Flat-rate charges one percentage on everything. Simple to understand and simple to budget. You overpay on cheap transactions — debit especially — to subsidise expensive ones, and the processor keeps the difference.

Tiered sorts transactions into qualified, mid-qualified and non-qualified buckets and charges a different rate for each. You are quoted the cheapest. Most cards do not land there.

Why the structure matters more than the number

Under flat-rate and tiered, you cannot separate the network’s cost from the processor’s margin. They arrive fused. That means you cannot tell whether a price rise came from Visa or from your processor, you cannot compare two providers except by all-in percentage, and an all-in percentage depends as much on your customers’ wallets as on anyone’s pricing.

Under interchange-plus, the margin is a number on the page. Two providers can be compared directly, because the floor is identical for both by definition.

That last column is worth sitting with. Interchange-plus means an April interchange increase reaches you directly. That is not a disadvantage hiding in the model — it is the same cost arriving under the other models too, just without a label on it.

When interchange-plus does not win

It is worth being straight about this.

Very small volume. If you process a few thousand dollars a month, the difference between models is small in absolute dollars, and a flat rate with no monthly fee may genuinely be the better practical choice.

Interchange-plus with fees bolted on. A low markup paired with a monthly service fee, a PCI fee, a statement fee and a gateway fee can easily cost more than a clean flat rate. The markup is not the price — the price is the markup plus everything else.

Mostly keyed or ecommerce, very small tickets. The per-transaction cents matter more than the percentage when the average sale is a few dollars, and the comparison has to be run on your real average ticket rather than on the percentage alone.

The dishonest version of this pitch is “interchange-plus is always cheaper.” The honest version is that interchange-plus is always legible, and legibility is what lets you find out whether it is cheaper for you.

How to compare two quotes properly

1. Get the markup as a number. Percentage plus per-transaction cents, in person and keyed, written down.
2. List every fixed fee separately — monthly, statement, PCI, gateway, batch, minimum. Add them up for a month.
3. Apply both to your real last month: your actual volume, your actual transaction count.
4. Ask what happens at renewal. Is there a term? An early termination fee? A rate-review clause?
5. Ask who owns the equipment. A lease is a separate, usually non-cancellable contract that can outlive the processing relationship by years.

Then compare the two totals against your current effective rate. If the saving does not survive that arithmetic, it was never there.

What we charge

Interchange + 0.50% + 10¢ in person. Interchange + 0.75% + 25¢ keyed. No contract, no monthly fee, no PCI fee. Those are the numbers the calculator on this site uses for our side, so what it shows you is what we would actually bill — and if the comparison says you are already priced well, we will tell you that instead.