There are two main components of interchange-plus pricing:
Interchange
First is the interchange, which is the fee that comes directly from the card networks. In other words, these are the fees charged by companies like Visa and Mastercard. Payment processors do not control these rates, and every merchant is required to pay the interchange.
Plus
The “plus” in interchange-plus pricing is the markup that your credit card processor is charging on top of the interchange fee. This cost comes in the form of a percentage fee and a transaction cost.
Interchange-plus pricing model, is charging a fixed markup on top of the card issuer’s fees. These rates are typically expressed as the interchange fee plus the markup.
Generally, interchange-plus pricing is more favorable for small businesses. This is because interchange-plus is not only more transparent, but businesses usually end up paying lower processing costs with this model.
Flat rate pricing
Flat-rate pricing aims to eliminate some of the confusion surrounding interchange fees and give you a simple, predictable set of rates that you’ll pay every time. The primary advantage of flat-rate processing is that you’ll always know in advance exactly how much a given transaction will cost to process. Most flat rates include both a percentage and a fixed per-transaction fee.
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