What is interchange-plus pricing, and why is it the only honest model?

Interchange-plus pricing splits your card-processing cost into two parts and shows you both. First, interchange: the fee the card networks set and pass to the bank that issued your customer’s card. Second, the plus: the markup your processor keeps. Every other pricing model blends those two numbers into one so you cannot tell them apart. Interchange-plus refuses to. That is the whole story, and it is why it matters more than any other choice on your statement.

What is interchange-plus pricing?

Interchange-plus pricing is a structure where you pay the exact interchange cost on each sale, at cost, plus a separate and disclosed processor markup. The interchange piece is not something your processor sets or can discount. Visa and Mastercard publish those tables and update them about twice a year, usually April and October. The plus is the only number your processor actually chooses, and in interchange-plus it sits on its own line where you can read it.

Contrast that with flat-rate or tiered pricing, where one percentage covers interchange and markup together. In those models you can see what you paid in total, but you cannot see how the total was split. You have no way to know whether the network took most of it or your processor did.

Why is interchange-plus the only model with a visible markup?

Because it is the only model built to keep the two costs apart. When interchange and markup travel on separate lines, the markup has nowhere to hide. On a real statement that looks like an interchange charge of, say, 1.95 percent of volume, and then a plus that might read 0.30 percent or 10 cents per transaction sitting beside it. You can add up the plus in a minute and know precisely what your processor earned from you last month.

That transparency cuts both ways, which is the point. If the markup were unreasonable, you would see it immediately and leave. A processor that quotes interchange-plus is agreeing to be measured every single month.

Interchange is the same wherever you go. The only thing that changes between processors is the markup. Interchange-plus is the only model that prints that number for you.

Why do most processors avoid interchange-plus?

Most processors avoid interchange-plus because a visible markup is a markup you can shop. When your cost is a single blended rate, the processor can widen the gap between what interchange actually costs and what it charges you, and you will never see it happen. Rewards cards carry higher interchange than plain cards, so as your customers carry fancier cards, a blended rate quietly earns the processor more while looking unchanged to you.

A separated markup takes that lever away. If interchange rises on a rewards card, that increase shows on the interchange line, and the plus stays exactly where it was. The processor cannot ride the network’s increase and pocket the difference. For a lot of processors, that is a feature they would rather not offer.

• A blended rate hides which side of the cost went up, so an interchange increase and a markup increase look identical on your statement.
• Tiered pricing goes further and lets the processor decide which bucket a card falls into, which is really just a markup you cannot audit.
• Interchange-plus removes both moves. What you see is what you pay, and the markup is the same on a debit card and a premium travel card.

Is a flat dime the same as interchange-plus pricing?

Yes. It is interchange-plus pricing, carried all the way to where the plus is a published flat dime instead of a hidden percentage: interchange at cost, plus a flat 10-cent markup per transaction, zero percent added to your volume. Traditional interchange-plus still quotes the plus as a percentage, sometimes 0.30 percent, sometimes more, which means the markup still grows every time a sale gets bigger. A flat dime does not. A 12-dollar sale and a 1,200-dollar sale carry the same 10-cent markup, because the work of moving the transaction is the same either way.

Here is a labeled illustrative example. A shop running 80,000 dollars a month across about 1,600 transactions on a 2.95 percent effective rate pays roughly 2,360 dollars a month. Interchange on that mix is about 1,560 dollars, near 1.95 percent. That means the processor markup is about 800 dollars a month. At a flat dime, the markup on the same 1,600 transactions is 1,600 times 0.10, or 160 dollars. Same interchange, same sales, about 640 dollars a month of difference, and all of it in the one number a percentage markup keeps blurry.

One thing to be square about, because a pitch that only ever points at its own product is worth nothing. The dime is the markup only. Besides interchange and the dime, there is one other fee: a PCI compliance charge billed once a year, and the amount is shown to you in writing before you sign. No monthly fees, no statement fees, no batch fees. The dime never goes up, and it can actually fall as your volume grows. If your current effective rate already beats a dime, usually because you run a high average ticket on a thin percentage, the right answer is to stay where you are, and our analyzer will tell you exactly that.