Interchange-plus pricing: How it works, costs, & examples (2026)

Interchange-plus pricing is a credit card processing model where you pay the actual interchange rate set by the card networks, plus a fixed processor markup. For example, 1.65% + $0.10 in interchange plus a 0.30% + $0.10 markup equals 1.95% + $0.20 per transaction. You see every cost on your statement.

It’s no secret that consumers today value the convenience of credit card payments. And with the continued rise of mobile and contactless payment options, it’s safe to say that non-cash payments will continue to grow. In fact, digital wallet adoption is projected to surpass 5.2 billion users globally in 2026, accounting for over 60% of the world’s population and roughly 38% of all point-of-sale payment value.

But as many businesses know, taking credit card payments comes with a price. Credit card fees are a major component of payment processing costs for businesses. In 2025, US businesses incurred a record US $198.25 billion in total card processing and swipe fees, highlighting the significance of understanding these costs. The rates that you’ll pay as a merchant will vary depending on your processor, though an important determining factor for your rates is the pricing model of your payments vendor.

In this post, we’ll shed light on the ins and outs of interchange-plus pricing, one of the most common pricing models in the world of credit card processing. We’ll also discuss the different pricing models around credit cards and how to select the best one for your business.

What is interchange-plus pricing?

Interchange-plus pricing is a model used by credit card processors to determine the cost paid by merchants per transaction. In this model, the credit card processor breaks down the fees that go to the bank or credit card issuer and the processor’s markup.

Interchange-plus pricing consists of two components: the interchange fee set by the card network and the processor’s markup set by the credit card processor. Compared with other merchant account pricing models (which we’ll touch on later), interchange-plus offers more transparency because the credit card processor outlines the markup that it charges on top of the credit card issuer’s fees.

To fully understand interchange-plus pricing, you need to be aware of the elements that make up the fee. There are two main components of interchange-plus pricing:

1. Interchange – First is the interchange, which is the fee that comes directly from the card networks. These are the fees charged by companies like Visa and Mastercard. Payment processors do not control these rates, and every merchant is required to pay the interchange.

2. Plus – The “plus” in interchange-plus pricing is the markup that your credit card processor is charging on top of the interchange fee. This cost comes in the form of a percentage fee and a transaction cost.

Example: If a card’s interchange fee is 1.65% + $0.10 and your processor’s markup is 0.30% + $0.10, you would pay 1.95% + $0.20 total on that transaction.

So, when a credit card processor uses an interchange-plus pricing model, it means that they’re charging a fixed markup on top of the card issuer’s fees. These rates are typically expressed as the interchange fee plus the markup.

A common question on the topic of interchange pricing is how much are the interchange rates? There’s one “right” answer to this because the interchange is calculated based on how much it costs to process specific cards. As we discussed in our post on interchange rates, basic credit cards (e.g., those without rewards or bells and whistles) are less expensive to process, while cards that come with miles and cash-back have higher interchange fees.

And it’s not just about card types. The following are also factored into the interchange fee:

• Whether the card is swiped or keyed in (card-present vs card-not-present transaction)

• The transaction size

• Whether or not the card is a member of a rewards program

If you are interested in finding out more about current interchange rates from the top card networks, visit their websites here:

• Visa

• Mastercard

• Discover

Here’s a snapshot of what a few common card types charge in interchange rates:

How is interchange-plus pricing calculated?

Card networks—such as Visa, Mastercard, Discover, and American Express—are at the heart of the payment processing ecosystem. These networks set the interchange fees that form a major part of your overall credit card processing fees. Interchange fees are transaction fees paid by the acquiring bank (the merchant’s bank) to the issuing bank (the customer’s bank) every time a credit or debit card payment is processed.

When a customer swipes, taps, or enters their card details, the card network facilitates the transaction and determines the interchange fee based on several factors. Typically, this fee is a percentage of the transaction amount plus a fixed fee. For example, a Visa credit card transaction might carry an interchange fee of 1.65% + $0.10, while a debit card payment could have a lower rate.

Interchange fees vary not only by card type (credit card vs. debit card), but also by transaction type (in-person or online), business industry, and even the region where the transaction occurs. Card networks regularly update their interchange fee schedules, which means the fees involved in card processing can change over time.

Understanding how card networks set and adjust interchange fees is essential for any business owner looking to manage credit card processing fees effectively. By staying informed about these fees, you can better anticipate your transaction costs and make more strategic decisions about which payment processing partners and pricing models are right for your business.

The structure of interchange fees is multifaceted and can significantly impact your payment processing costs. Interchange fees are typically calculated as a percentage of the transaction amount plus a fixed fee per transaction. For instance, a typical interchange fee might be 1.5% + $0.10 for a standard credit card payment, but this can vary widely depending on several factors.

Key elements that influence the interchange fee structure include:

• Type of card: Credit cards, debit cards, and premium or rewards cards each have different interchange rates.

• Transaction method: Card-present transactions (where the card is physically swiped or tapped) often have lower fees than card-not-present transactions (such as online or keyed-in payments).

• Business industry: Certain industries may qualify for lower interchange rates, while others may face higher fees due to increased risk.

• Card network: Each card network—Visa, Mastercard, Discover, and others—publishes its own interchange fee schedule, which is updated regularly.

Because interchange fees are a core component of what you pay to process card payments, understanding the fee structure is crucial. By knowing how these fees are determined, you can work with your payment processor to negotiate better rates, choose the most cost-effective payment methods, and ultimately reduce your overall card processing fees.

Processor markup is the additional fee your payment processor charges on top of the interchange fee set by the card networks. This markup is a key part of your total credit card processing fees and can have a big impact on your bottom line—especially if your business processes a high transaction volume.

Processor markup is usually expressed as a percentage of the transaction amount, a fixed per-transaction fee, or a combination of both—charged on top of wholesale interchange rates that range from 0.05% + $0.21 for regulated debit cards up to 2.20% to 2.95% + $0.10 for premium rewards and commercial credit cards. While the interchange fee goes to the issuing bank, the processor markup is what your payment processor earns for facilitating the transaction and providing related services.

Why does processor markup matter? Because it’s often the most negotiable part of your credit card processing fees. A lower processor markup can translate into significant cost savings, particularly for businesses with large sales volumes or high average transaction amounts. When comparing payment processors, it’s important to look beyond just the advertised rates and dig into the details of the processor’s markup. Understanding this fee structure empowers you to negotiate better deals and keep more of your hard-earned revenue.

Calculating interchange-plus pricing is straightforward once you understand its two main components: the interchange fee and the processor markup. This pricing model is designed to be transparent, showing you exactly what you’re paying to the card networks and what you’re paying to your payment processor.

Here’s how to calculate your total per-transaction fee under interchange-plus pricing:

1. Find the interchange fee: This is set by the card network and depends on the card type and transaction details (e.g., 1.5% + $0.10 per transaction).

2. Add the processor markup: This is the fee your payment processor charges on top of the interchange (e.g., 0.5% + $0.05 per transaction).

3. Combine both amounts: Add the percentage rates and the fixed fees together to get your total cost per transaction.

Example: If the interchange fee is 1.5% + $0.10 and the processor markup is 0.5% + $0.05, your total interchange-plus pricing would be 2.0% + $0.15 per transaction.

By understanding and calculating interchange-plus pricing, you can accurately compare different pricing models and payment processors, ensuring you’re getting the most cost-effective solution for your business.

Interchange-plus vs. flat-rate vs. tiered pricing

Generally, interchange-plus pricing is more favorable for small businesses compared to other pricing models, such as tiered pricing and bundled pricing. Comparing interchange-plus pricing to other models like bundled pricing and tiered pricing helps businesses choose the best fee structure for their needs. This is because interchange-plus is not only more transparent, but businesses usually end up paying lower processing costs with this model.

Here’s how interchange-plus stacks up compared with other common pricing models.

Bundled pricing is often used interchangeably with tiered pricing and can obscure different fees and other fees involved in payment processing, making it harder for businesses to analyze their true costs. When comparing interchange-plus vs other pricing models, interchange-plus stands out for its transparency and ability to itemize all fees, helping businesses make informed decisions about their fee structures.

Reviewing processing statements regularly is important to stay aware of changes in interchange fees and to understand all the fees being charged.

In summary, interchange-plus pricing is considered the most transparent pricing model for payment processing, making it easier for businesses to manage costs and avoid hidden fees.

Interchange-plus pricing vs. tiered pricing

Tiered pricing is a common pricing model when it comes to credit card processing. This model simplifies your fees by breaking them down into three main tiers — qualified, mid-qualified, and non-qualified.

Transactions that fall under the qualified category have lower fees attached to them, while your processor will charge higher rates for non-qualified transactions. The nature of a transaction will determine the category in which it belongs. 

For example, debit cards and non-reward credit card transactions typically fall under the qualified rate, while transactions involving corporate cards, higher rewards cards, and card-not-present transactions would be under the non-qualified category.

Since your transactions are categorized into 3 main tiers, this pricing model can make your statement easier to read and understand. But there’s a major downside: unlike interchange-plus pricing which displays the processor’s markup, the tiered pricing model lacks transparency when it comes to your fee breakdown.

As Merchant Maverick puts it, “Tiered pricing models make it impossible to tell how much of a processing charge is going to the issuing bank, the credit card associations (i.e., Visa, MasterCard, etc.), and how much is going to your merchant account provider.”

The result? You typically end up with a higher-than-expected credit card processing bill.

There’s another reason why this model is problematic. Many credit card processors would only advertise their lowest possible rates (i.e., the “qualified” rate) to entice businesses. The merchant is then lured to their services thinking that they’ll be paying lower fees when in reality, most of their transactions would fall under the non-qualified tier and thus would incur higher charges.

Moreover, as of April 2026, Visa has fully retired older B2B processing programs in favor of the Commercial Enhanced Data Program (CEDP). Merchants who fail to provide the required “enhanced data” (which is often hidden in tiered pricing models) may see their interchange costs on commercial card volume. These potential savings by Visa for is another reason for you to consider interchange-plus pricing over tiered.

Interchange-plus pricing vs. flat-rate model or blended pricing

Blended pricing (aka flat-rate model) is the easiest model to understand because you pay a fixed rate for all types of credit card transactions. So, whether a customer is paying with a debit, credit, or premium rewards card, the merchant will have a flat fee for all these transactions.

That said, while this model charges a flat-rate pricing for all card types, higher fees could apply depending on the nature of the transactions. Card-not-present payments, for instance, may incur higher fees.

This pricing model is certainly more favorable than tiered pricing, though you may still end up overpaying particularly if most of your customers use debit cards.

Who sets interchange rates?

The acquiring bank and the issuing bank are the two main parties who set interchange rates. Understanding their roles helps explain where interchange fees and processing costs come from. Scheme fees and assessment fees are additional costs from card networks that, along with interchange and acquirer fees, comprise the total charges passed to merchants.

Acquiring bank

The acquiring bank (or merchant bank) partners with your payment processor to let your business accept card payments. When a customer pays, the acquiring bank routes the transaction through the card networks (like Visa or Mastercard) and deposits the funds into your merchant account after settlement. In return, it charges payment processing fees, which may include per-transaction fees or monthly service fees.

Issuing bank

The issuing bank is the customer’s bank—the one that issued their card. It verifies the transaction amount, checks for available funds or credit, and authorizes or declines the payment. The issuing bank earns a portion of the interchange fee for taking on credit and fraud risk.

How they influence your rates

Together with the card networks, these banks determine the interchange rates you pay. Knowing how they interact helps you understand your processing fees, spot markup charges, and choose a transparent pricing model like interchange-plus pricing to better manage costs and protect your cash flow.

How do you calculate your effective rate?

Now that we’ve established the advantages of interchange-plus over other pricing models, let’s talk about how to find the right interchange-plus deal or setup for your business. Payment service providers use different pricing models to charge businesses for card transaction processing, so it’s important to understand these models when evaluating your options.

Remember that not all interchange-plus deals are created equal. Some processors tack on additional charges such as a monthly statement fee, a monthly PCI fee, surcharges, hidden fees, etc., and you need to be aware of these costs before signing on the dotted line.

Ultimately, payment processing decisions require due diligence to ensure the best fit for your business’s needs.

Run the numbers

The most important step you can take when determining the right interchange-plus deal is to do the math. If you’re already signed up with a credit card processor, look at your statement and calculate your effective rate.

Figuring out your effective rate shows you how much you’re actually paying overall. Once you know your rate, you’ll be able to make an informed decision about which interchange-plus plan is actually the best one for you.

Here’s how to figure it out:

Step 1. Identify the total amount of fees charged by your credit card processor.

Step 2. Find your total amount of credit and debit card transactions.

Step 3. Divide the total number of fees charged by the total amount of credit/debit sales. Once you get the answer, move the decimal two places to the right. This is your effective rate.

The equation looks like this:

(Total fees charged / Total processing volume) x 100 = Effective rate

Here’s an example:

Total amount of fees charged by your processing company: $325

Your total amount of credit/debit card sales: $17,300

325/17,300 = 0.018786

Now,  move the decimal two places to the right ( or x 100): 1.8786%.

If we round up, the effective rate is 1.88%.

If you’re still shopping around…

It’s a little trickier to calculate your effective rate when you aren’t signed up with a processor yet. Since you aren’t currently processing with them, you will have to use some averages, which means your effective rate will be an estimate.

Here’s the info you need to gather:

1. Your total amount of credit/debit card sales: Use your last months total or the average monthly total you sell. __________

2. Find the interchange-plus deal they are offering to you (interchange + ?%). ____________

3. Add up all of the monthly fees you would be charged (i.e. monthly fee, equipment lease, statement fee, etc.). _________

4. Find the per transaction cost, and multiply it by the number of transactions you usually do per month.  _________

Now that you have all of those blanks filled in, you’re ready to do your calculations.

Step 1. You’ll need to take your info from B and figure out your dollar amount. To do this, multiply your total sales times the decimal value of your total interchange-plus percentage.

The average interchange rate is 1.5%, so whatever the “plus” that they’re offering is added to the 1.5%. Don’t forget to make the percent a decimal when you multiply it by your sales.

For example:

Your sales = $15,000;

Interchange-plus offer = 1.5%+0.36%  

15,000 x .0186 = $279

Step 2. Add up the dollar amount you just found in step one to the dollar amounts you filled in the blanks on C and D.

Step 3. Divide the dollar amount you just found in step 2 by your total monthly credit/debit card sales. This will give you your estimated effective rate for the interchange-plus deal you are looking into.

Not sure what you’re really paying? Send us a statement and we’ll calculate your effective rate for free.

How do you read an interchange-plus statement?

To read an interchange-plus statement, look for two distinct line items:

• Wholesale fees (interchange + assessment): The non-negotiable costs charged by the issuing banks and card networks (Visa, Mastercard, Discover, Amex).

• Processor fee (the “plus”): The markup charged by your acquiring bank or processor to service your account.

Before diving into individual line items, navigate to the statement summary to see total sales volume, total fees charged, and your effective rate. To separate the interchange fees, look for a section titled “Interchange Detail,” “Interchange Charges,” or “Wholesale Fees.” Interchange rates vary based on card type, transaction environment, and processing risk.

Then identify network assessment fees. Near or within the interchange breakdown, you will see a series of small line items for network assessments. These are microscopic fees paid directly to Visa, Mastercard, and Discover for using their communication rails.

Lastly, isolate the processor markup (the “plus). Look for a section titled “Processor Fees,” “Service Fees,” “Authorization Fees,” or “Margin Charges.”

So, if your agreed rate is interchange + 0.20% + $0.10, on a $100 transaction with a 1.65% + $0.10 wholesale interchange rate:

Wholesale interchange = $1.65 + $0.10 = $1.75

Network assessment = $0.14 + $0.02 = $0.16

Processor markup = $0.20 + $0.10 = $0.30

So, when added together …

Total fee charged = $2.21 (2.21% effective rate)

Pros and cons of interchange-plus pricing

Pro: Full transparency into fees 

With interchange-plus pricing, you can see exactly where every penny of your processing costs is going—from the interchange fees set by the card networks to the processor’s fixed markup. This level of transparency helps businesses audit their processing bills more effectively and avoid hidden costs. If you value knowing precisely what you’re paying for and want to identify areas for savings, interchange-plus is often the best choice.

Pro: Often lower costs overall 

Because you are charged the actual interchange rates plus a relatively small, fixed markup, interchange-plus pricing can often result in lower total costs compared to tiered or flat-rate models. Businesses with a lot of debit card transactions or low-risk card activity stand to save significantly. Over time, even slight savings per transaction can add up to thousands of dollars annually—making interchange-plus a smart financial move for many companies.

Pro: Fair pricing across card types 

Unlike tiered pricing, where certain transactions are pushed into expensive “non-qualified” buckets, interchange-plus charges you based on the true cost of each transaction. This means you’re not penalized just because a customer uses a rewards card or corporate card. As a result, businesses can confidently accept a wide variety of payment types without fearing unexpected surcharges or unfair fees hidden in bundled tiers.

Con: Slightly more complex statements 

One downside of interchange-plus pricing is that your monthly statements can be more detailed—and, for some, more confusing. Each transaction will show the base interchange fee plus the processor’s markup, leading to longer, more technical reports. For businesses without someone familiar with payment processing terms, it may take a bit more effort upfront to understand what you’re being charged. However, the added clarity usually pays off over time.

Con: Potential extra monthly fees 

While interchange-plus pricing often delivers better transaction rates, some processors add extra fees like monthly service charges, PCI compliance fees, or batch fees. These additional costs can sneak up if you don’t read the fine print. It’s important to evaluate the full fee structure—not just the interchange-plus percentage—when comparing providers. Understanding all potential charges will ensure you don’t erode your savings with hidden monthly fees.

How do processing fees affect cash flow and profit margins?

These small, per-transaction costs have a direct impact on your cash flow and overall profit margins—especially if you process a high volume of credit and debit card transactions. For a small business with an average net profit margin of 10%, reducing transaction fees by just 0.5% can lead to a significant boost in overall profitability.

The cumulative impact of transaction fees

Every time you accept a card payment, a portion of the sale goes to cover interchange fees, processing rates, and markup fees from your payment processor. While a few cents per sale might not seem like much, those costs add up quickly over hundreds or thousands of transactions. High interchange costs can eat into margins, particularly for businesses with low average transaction amounts or thin profit margins. Interchange fees reduce your available working capital before the funds even reach your business bank account.

Switching to a transparent pricing model, such as interchange-plus pricing, gives you more visibility into where your money goes. By understanding each per-transaction fee and negotiating lower processor markups, you can reduce costs, improve cash flow, and protect your profit margins over time.

Implementing interchange-plus pricing

To implement interchange-plus pricing, you’ll need to partner with a payment processor that offers this transparent pricing model. Start by researching processors that clearly separate interchange fees from their own markup, rather than bundling everything into a flat-rate pricing structure.

To implement interchange-plus pricing, follow these steps:

1. Gather 3 months of statements.

2. Calculate your current effective rate.

3. Compare quotes on markup and monthly fees.

4. Check contract terms, such as termination fees and clauses that allow markup changes.

5. Review your first statement.

While interchange-plus pricing can be more complex than flat-rate pricing, it often leads to greater cost savings—especially for businesses with higher transaction volumes or a large number of debit card payments. Take the time to analyze your sales data and compare different pricing models. By implementing interchange-plus pricing, you can optimize your payment processing, reduce unnecessary fees, and improve your business’s bottom line.

Is interchange-plus right for your business?

An interchange-plus model saves money compared to flat-rate pricing depending on three specific variables: monthly processing volume, average ticket size, and card mix.

• Monthly processing volume: For businesses processing above $10,000/month, interchange-plus wins over flat-rate pricing. Once monthly volume covers the fixed monthly software/account fee, saving 0.30% to 0.80% on every transaction directly translates to net cash savings.

• Average ticket size: For businesses processing larger ticket items, interchange-plus is a major cost-saver. For example, on a $500 ticket, flat-rate pricing (2.9% + $0.30) costs $14.80. With interchange-plus (e.g., rewards card @ 1.70% + $0.10 + 0.20% IC+ markup), you pay $9.60. You save $5.20 on a single sale.

• Card mix: The best card mix for interchange-plus pricing includes a high debit volume, in-person / card-present swipes or taps, and B2B / Level 2 or 3 cards.

Minimizing your credit card processing costs requires doing your research and crunching some numbers, but the effort is well worth it. When considering your options, it’s crucial to compare interchange-plus vs other pricing models, such as flat-rate and tiered pricing, to determine which is most transparent and suitable for your business needs, whether you’re retail, restaurant, salon, healthcare, and other. Hidden charges and markups can cost you hundreds of dollars per month, and as a small business, those are expenses that you’re better off reinvesting in your company.

Remember, the total transaction value and the number of transactions processed can significantly impact the fees you pay, as interchange fees are often calculated as a percentage of the total transaction. Additionally, understanding how credit card networks and payment service providers operate is essential for making informed payment processing decisions.

So, take the time to evaluate your options around credit card processors, and see to it that you’re getting the best deal possible. Interested in us doing the work for you? Payment Depot can provide you with a no-cost quote and comparison of the rates you would pay under different plan types and guide you to what would be the most cost-efficient for your business.

Consider memberships as an alternative to interchange-plus pricing

If you have a hard time swallowing the traditional interchange-plus pricing fees, then you should consider processors that charge membership fees instead of markups (Stax is a good example).

While these types of processors may technically fall under the interchange-plus model, the “plus” component of their fees are actually membership costs. So rather than charging you an interchange fee + markup for every transaction, you only have to pay for a flat membership fee every month.

If you’re ready to save with interchange-plus pricing, get started with Payment Depot below.

Quick FAQs about interchange-plus pricing

Q: What is interchange-plus pricing in credit card processing?

Interchange-plus pricing is a payment processing model where the fees are divided into the interchange fee set by the card networks (like Visa and Mastercard) and a fixed markup from the credit card processor. This model provides transparency, allowing merchants to see the exact costs associated with each transaction.

Q: How does interchange-plus pricing differ from tiered pricing?

Interchange-plus pricing separates actual interchange fees and processor markups, offering clear visibility into transaction costs. In contrast, tiered pricing groups transactions into categories (qualified, mid-qualified, non-qualified), which can obscure the true cost breakdown and potentially lead to higher fees due to less transparency.

Q: Why might a business choose interchange-plus pricing over flat rate pricing?

Businesses might prefer interchange-plus pricing over flat rate pricing because it often results in lower overall costs by charging the true interchange rates plus a small markup. Flat rate pricing, while simpler, can lead to higher costs for transactions that would otherwise incur lower fees under interchange-plus.

Q: What are the pros and cons of interchange-plus pricing?

Pros: Offers full transparency into fees, often results in lower costs, and provides fair pricing across different card types without penalizing certain transactions.

Cons: Monthly statements can be more complex, and there may be additional monthly fees that need to be considered.

Q: How can businesses calculate their effective rate under interchange-plus pricing?

To calculate the effective rate, divide the total fees charged by your processor by your total credit/debit card sales, and multiply by 100 to convert it to a percentage. This helps businesses understand the actual percentage of sales going towards processing fees.

Q: What factors influence interchange fees under this pricing model?

Interchange fees can vary based on card type, whether the transaction was swiped or keyed in, the transaction size, and if the card is part of a rewards program. These factors are determined by the card networks and are outside the control of the payment processor.

Q: Is interchange-plus pricing suitable for small businesses?

Yes, interchange-plus pricing is often favorable for small businesses due to its transparency and potential for lower processing costs compared to tiered and flat rate pricing models.

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