Interchange-Plus Pricing

What Is Interchange-Plus Pricing?

A card processing model in which the operator pays the true interchange cost set by Visa, Mastercard, and the other card networks, plus a fixed, disclosed markup from the processor. The markup is usually quoted in basis points, where one basis point equals one hundredth of a percent, so "cost plus 50 bps" means the processor adds 0.50% on top of whatever the network charges for that specific card. It is the transparent alternative to flat-rate pricing, where a processor quotes one blended number such as "2.4% + 30 cents" and keeps the difference between that number and the real network cost on every transaction.

The distinction matters most to operators with a mixed sales floor. A guest tapping a debit card at your counter costs the network far less than a rewards credit card typed into an online checkout, but flat-rate pricing charges you the same either way. Under interchange-plus, that savings flows back to you rather than to the processor. Over a season with tens of thousands of card-present transactions, the gap between the two models is often larger than the software fee being debated.

Related Terms

• Credit Card Fees

• Per Transaction Fee

• Merchant of Record

• Booking Fee

• Convenience Fee (Ticketing)