Interchange-Plus Pricing Explained: The Clearest Way to Pay for Card Processing
If you accept credit cards, a portion of every sale goes toward credit and debit card processing fees. But how those fees are calculated, and how much your provider marks them up, varies enormously depending on your pricing model. Interchange-plus pricing is widely considered the clearest and most cost-effective option for most businesses, because it separates the costs you can’t avoid from the markup you’re actually paying your processor.
Here’s exactly how it works, why it matters, and how it stacks up against the alternatives.
What is interchange-plus pricing?
Interchange-plus pricing (sometimes called “interchange pass-through” or “cost-plus” pricing) is a credit card processing model where you pay two clearly separated components on every transaction:
- Interchange: the non-negotiable fee set by the card networks (Visa, Mastercard, Discover, American Express) and paid to the bank that issued your customer’s card.
- The “plus”: a fixed markup your payment processor adds for its services, typically quoted as a small percentage plus a flat per-transaction fee (for example, interchange + 0.25% + $0.10).
The key word is separated. With interchange-plus, the cost of the card networks is passed straight through to you at cost, and your processor’s profit is stated as a distinct, fixed number. You can see exactly what goes to the networks and exactly what goes to your provider.
How it works in practice
Say a customer pays you $100 with a rewards credit card.
- The interchange rate for that card might be 1.65% + $0.10 = $1.75.
- Your processor’s markup is interchange + 0.25% + $0.10 = $0.35.
- Your total cost on that sale is $2.10.
On your statement, those numbers appear as separate line items. If the customer had used a debit card with a lower interchange rate, your cost would drop accordingly, and your processor’s markup would stay exactly the same. That consistency is what makes the model so transparent: the only number your provider controls is the “plus,” and it never changes without your knowledge.
The advantages of interchange-plus pricing
Transparency. You can see precisely what the card networks charge and what your processor keeps. There are no blended or hidden fees disguising the markup.
Lower total cost for most businesses. Because the markup is fixed and thin, you’re not overpaying on transactions that carry low interchange rates. Industry analyses consistently find interchange-plus is cheaper than tiered pricing for the majority of established merchants.
You benefit from lower-cost cards. When customers pay with debit cards or other low-interchange cards, you pay less. The savings pass directly to you rather than being absorbed by your processor.
Easier to audit and compare. Because the markup is a single, stated number, comparing two interchange-plus quotes is straightforward: whoever has the lower “plus” is cheaper.
Scales well as you grow. Higher volume means the fixed markup represents a smaller share of each sale, so your effective rate tends to improve over time. As your needs change, the Valmar team can help you keep your rates competitive.
How interchange-plus compares to other pricing models
Interchange-plus vs. flat-rate pricing
Flat-rate pricing charges one simple rate for every transaction, regardless of the card used. It’s predictable and easy to understand, which is why popular all-in-one providers default to it. The trade-off is cost: the flat rate has to cover the most expensive interchange categories, so on lower-cost transactions you’re effectively overpaying. Flat-rate works well for very small or new businesses with low volume, but most growing merchants pay more under it. (See how Valmar’s payment processing solutions are priced.)
Interchange-plus vs. tiered pricing
Tiered (or “bundled”) pricing sorts transactions into buckets, usually “qualified,” “mid-qualified,” and “non-qualified,” each with its own rate. The problem is that the processor decides which transactions fall into which tier, and the most expensive “non-qualified” bucket often catches more transactions than you’d expect. Tiered pricing hides the underlying interchange cost entirely, making it the least transparent and often most expensive model.
Interchange-plus vs. subscription / membership pricing
Subscription pricing charges interchange at cost plus a flat monthly membership fee instead of a percentage markup. For high-volume businesses, this can be even cheaper than interchange-plus. For lower-volume businesses, the monthly fee may outweigh the savings.
Who should consider interchange-plus pricing?
Interchange-plus tends to be the best fit for businesses that have moved past the startup phase and are processing a meaningful, steady volume of card payments: retailers, restaurants, service businesses, e-commerce stores, and B2B companies. If you operate in a regulated or high-risk industry, transparent pricing matters even more, since those accounts are the most likely to be overcharged. If you’re currently on a tiered plan, or you’ve never seen interchange broken out as a separate line on your statement, there’s a strong chance you’re paying more than you need to. Get a free quote to see where you stand.
Frequently asked questions
Is interchange-plus pricing cheaper than flat-rate?
For most established businesses, yes. Because the markup is thin and fixed, you avoid overpaying on transactions that carry low interchange rates. Very small or brand-new businesses with minimal volume may find flat-rate simpler and comparable in cost.
What does the “plus” in interchange-plus mean?
The “plus” is your payment processor’s markup, the only part of the fee your provider actually controls. It’s usually quoted as a small percentage plus a fixed per-transaction fee, such as 0.25% + $0.10.
Can I negotiate interchange rates?
No. Interchange rates are set by the card networks and are the same for every processor. What you can negotiate is the “plus” markup.
How do I know which pricing model I’m currently on?
Look at your monthly processing statement. If you see interchange listed as a separate, itemized cost with a clearly stated markup, you’re on interchange-plus. If you see “qualified / non-qualified” tiers or a single blended rate with no interchange detail, you’re likely on tiered or flat-rate pricing. For more answers, see our frequently asked questions.
Curious what you’re really paying?
Most business owners have no idea how much of their monthly processing bill is markup versus true cost, because tiered and flat-rate statements are designed to keep it that way. Valmar will review your current statement for free, break down exactly where your money is going, and show you what you’d pay under transparent interchange-plus pricing.
Get your free statement review →
No obligation. No jargon. Just a clear picture of what you’re actually paying.
