What Is Interchange-Plus Pricing?
Interchange-plus pricing separates applicable interchange and card-network fees from the processor's markup, making the provider's pricing component easier to identify. Pass-through treatment, additional fees, and pricing arrangements vary by provider and merchant agreement.
Direct Answer
Interchange-plus pricing separates applicable interchange and card-network fees from the processor's markup, making the provider's pricing component easier to identify. Pass-through treatment, additional fees, and pricing arrangements vary by provider and merchant agreement.
Direct Answer
Interchange-plus pricing is a payment processing model that separates applicable interchange and card-network assessment fees from the processor or provider's markup, making the provider's pricing component easier to identify. How those underlying costs appear, what is passed through, and what additional fees apply vary by provider and merchant agreement.
How It Works
A card transaction generally involves three cost layers:
- Interchange — paid to the cardholder's issuing bank, set by the card networks.
- Assessment (network) fees — paid to the card networks, set by the networks.
- Processor/provider markup — the fee your payment provider adds for its service.
Under interchange-plus, interchange and assessments are typically listed at the network's published rates and the processor's markup is shown separately. Actual statements, pass-through treatment, surcharges, and additional fees differ by provider and merchant agreement, so the model is best understood as a separation of cost layers rather than a guarantee that every underlying cost is passed through identically.
Key Points
- Interchange-plus separates wholesale network costs from your provider's markup.
- It is generally considered a transparent pricing model because the markup is itemized.
- The markup is typically expressed as basis points plus a per-transaction fee, though formats vary.
- Total cost rises and falls with interchange, which the networks update periodically.
What Merchants Should Know
Interchange-plus makes it easier to see whether your provider's markup is reasonable and to compare providers. For a deeper comparison of when interchange-plus versus flat-rate fits a business, see the related Blog article. Your actual pricing depends on your provider, volume, risk profile, and agreement.
