Interchange Plus Pricing: What It Is, What It Should Cost, and How It Gets Padded
Interchange plus is the only common pricing model that shows you what the card networks charge separately from what your processor keeps. Here is how it works, how it compares with flat-rate and tiered pricing, and what a fair markup looks like.
Interchange plus pricing splits your bill into the card networks’ cost and the processor’s markup. Honestly priced, it is interchange and network fees at cost, plus a markup of about 5 basis points. That beats flat-rate and tiered pricing at every volume. But the label alone protects nothing. Interchange plus can be padded in ways a merchant will not see without checking the statement.
What is interchange plus pricing?
Interchange plus pricing is a way of charging for card processing where the processor passes the card networks’ costs through to you at cost, then adds its own markup as a separate, stated number. Every card payment you accept is priced in three parts.
The first two parts are the same for every processor. Only the third part changes when you switch. That is why interchange plus is the model where shopping around actually means something.
Interchange plus vs flat rate vs tiered pricing
Most small businesses are on one of three models. They differ in one thing that matters: whether you can see where the processor’s margin sits.
| Model | How it works | Where the processor’s margin sits |
|---|---|---|
| Flat rate | One rate on every card, such as 2.9% plus 30 cents. Used by Stripe, Square and most payment apps. | Hidden inside the rate. The processor earns the most on your cheapest cards. |
| Tiered | Cards are sorted into buckets, usually qualified, mid-qualified and non-qualified, each with its own rate. | Hidden inside the buckets. The processor decides which bucket each card lands in. |
| Interchange plus | Interchange and network fees at cost, plus a stated markup. | A separate number on the statement. You can see it and negotiate it. |
Interchange plus vs flat rate
A flat rate has to be set high enough to cover the most expensive cards. On every debit card and basic credit card, you overpay, and the difference is the processor’s margin. Here is what a business taking $50,000 a month at a $50 average sale pays each way.
| Pricing | Per month | Per year |
|---|---|---|
| Flat rate, 2.9% + 30¢ (online) | $1,750 | $21,000 |
| Flat rate, 2.7% + 5¢ (in person) | $1,400 | $16,800 |
| Interchange + 5 bps | $1,240 | $14,880 |
Interchange-plus figures use the 2.25% blended interchange we typically see in audits, plus about 0.14% in card network fees, about 2 cents per sale in network per-item fees, and a 0.05% markup. Your own interchange depends on your card mix.
Flat-rate providers sell simplicity, and it is real. But choosing a processor because it is easy is like doing your Thanksgiving shopping at the corner convenience store. The setup happens once. The premium is paid on every sale, for as long as you stay. We compare the two biggest flat-rate providers in Stripe vs Square.
Interchange plus vs tiered pricing
Tiered pricing looks like a discount. A merchant is quoted a low “qualified” rate and assumes that is what they pay. In practice, rewards cards, business cards, keyed payments and online payments are routinely placed in the mid-qualified or non-qualified tiers, at much higher rates. The processor sets the rules for which card lands where, and can change them.
Interchange plus removes the buckets. Each payment carries its actual interchange category, so there is nothing for the processor to sort.
What should interchange plus cost?
Interchange and network fees are the same whoever your processor is, so the only question is the markup. Quotes vary widely. A common one is interchange plus 0.20% and 10 cents per transaction. Here is what different markups cost the same $50,000-a-month business, on top of interchange and network fees.
| Markup | Markup per month | Markup per year |
|---|---|---|
| 0.30% + 10¢ | $250 | $3,000 |
| 0.20% + 10¢ | $200 | $2,400 |
| 0.10% + 5¢ | $100 | $1,200 |
| 0.05% (5 basis points) | $25 | $300 |
A basis point is one hundredth of one percent, so 5 basis points is 0.05%. At that level the processor still earns a margin, and you keep almost all of what flat-rate and tiered pricing take.
Interchange plus plus
“Interchange plus plus,” or IC++, is a term used mostly in Europe. It spells out the three parts separately: interchange, plus the card scheme fees, plus the processor’s markup. In the US the same structure is usually just called interchange plus, because an honest interchange-plus account already passes the network fees through at cost as their own line.
How interchange plus gets padded
Being on interchange plus does not by itself mean you are billed fairly. The model makes the markup visible, so a processor that wants more margin moves it somewhere you are not looking.
- Padded interchange. The markup is small and disclosed, and the interchange passed through has been inflated. You watch the small number while the big one moves.
- Bundled categories. Interchange is shown as one lump instead of broken out by category, so there is nothing to check it against.
- Fees outside the markup. The agreed markup never changes, while new fees with network-sounding names appear elsewhere on the statement.
A low rate is not the same as a low cost. Processors can quote a low markup and win the money back through marked-up network fees, fees no card network charges, and increases after the contract is signed. Card processing pricing is largely unregulated, and overbilling is common.
We documented a merchant who negotiated a 7 basis point markup and ended up paying 58, with every fee disclosed. Read when your processor promises to make things right.
We make the full case in Zero markup processing does not exist. Interchange plus pricing does. And we explain how a quoted rate can hide the real cost in How can I have the lowest discount rate and the worst deal?
What to ask for in an interchange plus agreement
- Interchange by category. Every card category on the statement, with volume, count and fee for each, so the pass-through can be checked against the published schedules.
- Network fees itemized at cost. Each network fee on its own line, at the networks’ published rate, with no markup.
- The markup in writing. The percentage and per-transaction amount, stated in the agreement.
- A complete fee schedule. Every other fee listed up front, so anything new on a statement stands out.
Then check the statements. Our Statement Decoder explains the line items one by one, and the current interchange rates page shows what the networks actually charge.
Run your own numbers
On Stripe or Square now? The Stripe fee calculator and the Square fee calculator show what the same sales would cost on interchange plus 5 basis points. On any other processor, the credit card processing fee calculator works straight from your statement.
Common questions
What is interchange plus pricing?
Interchange plus pricing is a card processing pricing model where the processor passes interchange and card network fees through at cost and adds its own markup as a separate, stated amount. It is the only common model where you can see what the processor keeps.
Is interchange plus cheaper than flat rate?
Priced honestly, yes. A flat rate has to cover the most expensive cards, so you overpay on every cheaper one. Interchange plus charges each card its actual cost plus the markup. At a 5 basis point markup, interchange plus costs less than flat-rate pricing at every volume.
What is a good interchange plus rate?
Interchange and network fees at cost, plus a markup of about 5 basis points, which is 0.05%. Many quotes are far higher, such as interchange plus 0.20% and 10 cents per transaction, which on $50,000 a month costs about $2,100 a year more in markup.
What is the difference between interchange plus and tiered pricing?
Tiered pricing sorts cards into qualified, mid-qualified and non-qualified buckets, each with a bundled rate, and the processor decides which bucket each card lands in. Interchange plus charges each card its actual interchange category plus a separate markup, so there are no buckets to sort.
What is interchange plus plus?
Interchange plus plus, or IC++, is a term used mostly in Europe for pricing that lists interchange, card scheme fees and the processor’s markup as three separate parts. In the US the same structure is usually just called interchange plus.
Can interchange plus pricing be padded?
Yes. The three common ways are inflating the interchange passed through, lumping interchange categories together so they cannot be checked, and adding fees outside the agreed markup. The markup stays as promised while the total goes up.
Cite this page
How these figures were built. Flat-rate examples use Stripe’s published US rates as checked in September 2026. Interchange-plus figures use the blended interchange weAudit typically sees in client audits, with estimated network fees. Markup examples apply each markup to $50,000 a month in 1,000 transactions. Results are estimates, not quotes.
On interchange plus already? Let us check it.
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