Interchange plus pricing (sometimes called "cost-plus pricing") is one of the most transparent fee structures offered by acquiring banks and payment processors. In this model, the merchant is charged the exact, un-marked-up interchange fee set by the card networks (Visa, Mastercard), plus a separate, fixed markup applied by the payment processor.
How the Fees Break Down
Every credit card transaction has a wholesale cost called the "interchange rate." This rate varies wildly based on the card type (e.g., a basic debit card has a lower rate than a premium travel rewards credit card) and how the transaction was processed (Card-Present vs. Card-Not-Present).
The Benefit to the Merchant
In older "tiered" pricing models, processors would bundle these varying rates into broad categories (Qualified, Mid-Qualified, Non-Qualified) and charge a flat, usually higher, blended rate, pocketing the difference. Interchange plus completely separates the processor's profit margin (the "plus") from the wholesale cost, giving the merchant total transparency into exactly what they are paying for every single transaction.
