# What is interchange-plus pricing?

URL: https://www.paydude.io/resources/what-is-interchange-plus-pricing
Type: Guide
Published: 2026-09-02 · Updated: 2026-09-02
Summary: Interchange-plus passes network costs through with a disclosed markup. How it compares to flat-rate pricing, and the volume where it starts to win.

**Interchange-plus pricing passes the actual interchange and network assessment through to you at cost, then adds the processor''s own markup as a separate, disclosed line.** You see exactly what the networks took and exactly what the processor kept. It is sometimes written as interchange++ or IC+.

## Summary

You pay real interchange plus a stated markup, itemised separately. Cheaper on debit-heavy volume; can cost more on premium rewards cards. Usually worth exploring somewhere above $50,000–$100,000 a month. The markup is the only negotiable component.

## How it is quoted

```text
Interchange + 0.4% + 8¢

On a $100 debit transaction:
  Interchange           $0.27   (0.05% + 22¢, regulated debit)
  Assessment            $0.14
  Processor markup      $0.48   (0.4% + 8¢)
  ------------------------------
  Total                 $0.89   = 0.89% effective

The same $100 on a premium rewards card:
  Interchange           $2.10
  Assessment            $0.14
  Processor markup      $0.48
  ------------------------------
  Total                 $2.72   = 2.72% effective
```

That variation is the whole story. On a flat rate you would pay 2.9% + 30¢ on both, so the debit transaction costs you 3.2% instead of 0.89%. The processor keeps the difference.

## The trade-off

**Interchange-plus versus flat rate**

|  | Interchange-plus | Flat rate |
| --- | --- | --- |
| Transparency | You see every component | One blended number |
| Cost on debit | Very low | Same as credit |
| Cost on premium cards | Higher | Same as debit |
| Predictability | Varies every month | Fixed |
| Reconciliation | Genuinely complex | Trivial |
| Typically better for | Higher volume, debit-heavy | Lower volume, mixed cards |

> **What you are really buying with a flat rate:** Flat-rate pricing is partly an insurance product. The processor absorbs the variance between a cheap debit card and an expensive corporate card and charges you an average. That averaging has real value at low volume, where a single expensive month matters.

## When it starts to win

Three factors decide it, and volume is only one.

1. **Your card mix.** Heavy debit volume benefits most, because regulated debit interchange is far below any flat rate.
2. **Your volume.** The markup is negotiable, and negotiating leverage arrives with volume.
3. **Your appetite for variance.** A rate that moves month to month is harder to forecast and harder to reconcile.

The honest test is arithmetic rather than principle: take a real month of statements, work out your [effective rate](https://www.paydude.io/resources/tools/effective-rate-calculator), and compare it against what interchange-plus would have cost on the same transactions. Providers will run that analysis for you, though naturally with an interest in the answer.

For a side-by-side of who uses which model, see the [processor fee comparison](https://www.paydude.io/resources/payment-processor-fee-comparison).

**Published flat rates, without the negotiation** Paydude tiers improve automatically with volume — no renegotiation, no sales call. — [See the rates](https://www.paydude.io/pricing)

## Frequently asked questions

### Is interchange-plus cheaper than flat-rate pricing?

Usually at volume, and usually on debit-heavy card mixes, because you keep the saving when a customer uses a cheap card. On premium rewards cards it can cost more. Flat-rate pricing averages that variation for you, which is more expensive on average but predictable.

### At what volume should I switch to interchange-plus?

There is no universal threshold, but most merchants find it worth exploring somewhere between $50,000 and $100,000 a month. Below that, the savings rarely justify the negotiation, the underwriting and the more complex reconciliation.

### What does 'plus' actually mean?

The processor's markup, quoted as a percentage plus a fixed amount — for example 'interchange + 0.4% + 8¢'. That markup is the only negotiable part; interchange and network assessments are identical everywhere.

### Why is my interchange-plus statement so complicated?

Because every transaction can fall into a different interchange category, and a full statement itemises them. That granularity is the point of the model, but it does mean reconciliation takes real work compared to a single blended rate.