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+.
How it is quoted
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¢)
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Total $0.89 = 0.89% effective
The same $100 on a premium rewards card:
Interchange $2.10
Assessment $0.14
Processor markup $0.48
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Total $2.72 = 2.72% effectiveThat 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 | 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 |
When it starts to win
Three factors decide it, and volume is only one.
- Your card mix. Heavy debit volume benefits most, because regulated debit interchange is far below any flat rate.
- Your volume. The markup is negotiable, and negotiating leverage arrives with volume.
- 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, 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.
GOOD QUESTIONS
Frequently asked
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.