Interchange-plus pricing (also called cost-plus or pass-through pricing) splits every card fee into two parts: the cost of the card, which goes to the card-issuing bank and the card network, and the processor’s markup, which is everything the processor charges above that cost. You pay the first part at cost. You can see, compare and negotiate the second.
That split is the whole point. On flat-rate and tiered pricing, the two parts are blended together, so you can’t tell what the card cost from what the processor kept.
The three pieces of every card fee
Interchange
Interchange is the largest piece. It’s paid to the bank that issued your customer’s card, and it’s set by the card networks in long published tables. The rate depends on:
- The card type. Debit, standard credit, premium rewards credit, business, corporate and purchasing cards all have different rates.
- How the card was taken. Tapped or dipped in person is cheaper than keyed in, which is cheaper than many online transactions.
- Your industry. Some business types, such as supermarkets or charities, have their own categories.
- The data sent with it. On business cards, sending invoice line items (Level 3 data) can lower the rate considerably.
Rough ranges, to give you a sense of scale: regulated debit runs a few tenths of a percent plus around 22 cents, standard consumer credit often runs around 1.5% to 1.8% plus 10 cents, and premium rewards and many business cards run higher, often 2.0% to 2.7% or more. The networks revise these tables, usually twice a year, so treat any specific figure as a snapshot.
Assessments and network fees
Visa, Mastercard, Discover and American Express each charge their own small fees for using their networks. These usually add up to something like 0.13% to 0.15% of volume, plus small per-transaction and monthly network fees. Like interchange, they’re the same no matter who your processor is.
The processor’s markup
Everything else is the processor’s revenue. On interchange-plus pricing, the core of it is usually quoted as two numbers:
- A percentage, often quoted in basis points (bps). 25 bps is 0.25%.
- A per-transaction amount, such as 10 cents.
Most processors also charge other lines: authorization, batch, PIN debit, gateway, monthly, PCI or equipment fees. Those are part of the markup too, even if they’re listed separately, so count them. Some processors price these differently for different kinds of payments, such as debit versus credit, or in-person versus keyed.
A worked example
Here’s a business doing $40,000 a month in card sales with an $80 average ticket, so 500 transactions a month. We’ll assume a simple card mix and approximate interchange rates. These are illustrations, not a quote.
| Card group | Volume | Transactions | Approx. interchange | Cost |
|---|---|---|---|---|
| Debit (regulated) | $8,000 | 100 | 0.05% + $0.22 | ~$26 |
| Standard credit | $20,000 | 250 | 1.65% + $0.10 | ~$355 |
| Rewards credit | $8,000 | 100 | 2.30% + $0.10 | ~$194 |
| Business credit | $4,000 | 50 | 2.50% + $0.10 | ~$105 |
| Interchange total | $40,000 | 500 | ~$680 | |
| Assessments and network fees | ~0.14% | ~$56 | ||
| Cost of the cards | ~$736 |
That ~$736 is the floor. Any processor in the country pays roughly that much to run this month’s sales. Now add a markup. To keep the math simple, suppose it’s 0.25% + $0.10 on every card, with no other fees:
| Piece | Calculation | Monthly |
|---|---|---|
| Cost of the cards | from the table above | ~$736 |
| Percentage markup | 0.25% × $40,000 | $100 |
| Per-transaction markup | $0.10 × 500 | $50 |
| Total | ~$886 |
Your effective rate is $886 ÷ $40,000, about 2.2%. And you know exactly what the processor earns: $150 a month, or about 0.38% of volume.
Now compare a flat rate of 2.9% + 30 cents on the same month: $1,160 + $150 = $1,310. The cost of the cards didn’t change. The processor’s share went from $150 to about $574.
Why the markup is the part worth negotiating
Look at the example again. Of the $886 total, $736 would be the same at any processor for those same payments, taken the same way. The processor’s number is the $150.
That has two consequences.
First, compare quotes on everything above cost, not on a headline rate. Add up every processor line, the percentage, per-transaction, authorization, batch, monthly and any other fees, and price it on your own card mix and transaction count. A quote that is cheap on the percentage but expensive per transaction can cost a small-ticket business more. The lower total above cost wins.
Second, be wary of anyone who says they can lower your interchange. Nobody can lower the rate for a given card, taken a given way. What a processor can do is help you qualify for better categories: making sure in-person cards are tapped or dipped rather than keyed, sending the right address data on keyed sales, and sending Level 3 data on corporate and purchasing cards. Those are real savings, and they show up as a lower cost of cards on an interchange-plus statement.
What interchange-plus looks like on a statement
A clean interchange-plus statement has:
- An interchange section listing each category, its volume, count and rate.
- An assessments section listing network fees.
- A processor fees section with your markup and every other processor fee, each one matching your agreement.
If you can’t find an interchange section, you’re not on interchange-plus, whatever the sales sheet said. How to read a merchant statement walks through each section.
The honest downsides
Interchange-plus isn’t magic. A few things to know:
- Your total still moves. When more customers pay with rewards cards, interchange goes up, and so does your bill. That’s real cost, not a processor trick, but it means your monthly number isn’t fixed.
- Statements are longer. More lines, more category names. It’s more to read, but every line can be checked.
- A low markup can hide behind monthly fees. A processor can quote a tiny percentage and make it back on statement, PCI, gateway and “platform” fees. Add them all up. Hidden credit card processing fees lists the usual ones.
Questions to ask about any interchange-plus quote
- What is every fee above cost: percentage, per-transaction, authorization, PIN debit, batch, gateway?
- Are those numbers written into the agreement?
- What monthly, annual and PCI fees are there, if any, and what is each one for?
- Is there a contract term or a cancellation fee?
- Will interchange changes pass through at cost, up or down?
- Can you send Level 3 data on business cards?
- Will the quote show every current fee next to the proposed one, and the card mix it’s based on?
How Mojo builds a program on top of cost-plus
Mojo Payments uses cost-plus pricing underneath every account: interchange and card-brand fees pass through at cost, exactly as Visa, Mastercard, Discover and Amex set them. No tiers, no “non-qualified” surcharges, month-to-month, no cancellation fee.
On top of that, we build a pricing program from your own statement rather than handing you a rate card:
- Each part of the bill is priced separately. Card markups, per-transaction and authorization fees, PIN debit, batch, monthly, gateway, PCI and equipment are each their own line.
- The payments you run most get the lowest price. If most of your volume is small debit tickets at the counter, or keyed invoices, that’s where the program is cheapest.
- Tools lower the cost of the rest. Level 3 data for business cards, a PIN debit prompt so debit isn’t run as credit, card-present terminals instead of keyed entry, CVV and ZIP prompts on keyed payments, secure hosted pay links, tokenization and diagnostics.
- The quote shows all the math. Every fee line, current next to proposed, plus the card mix it’s based on. The combined total is lower than what you pay today, or we tell you we can’t beat it.
There’s no single markup and no public rate card, because every program is built from a real statement.
Want to see your own numbers? Apply online and upload your statements, and we’ll return a side-by-side quote within 24 hours. If we can’t save you money, we’ll say so. Get your free statement review, or start with the savings calculator.
Frequently asked questions
What is interchange-plus pricing?
It is a pricing model where you pay the card networks' actual interchange and assessment fees at cost, plus your processor's own markup and fees, such as a percentage, a per-transaction amount and any monthly fees. The cost and the markup appear separately on your statement.
Is interchange-plus the same as cost-plus pricing?
Yes. Cost-plus, interchange-plus and pass-through pricing describe the same idea: the cost of the card goes through at cost, and the processor's margin is a separate, visible markup.
Can I negotiate interchange?
No. Interchange is set by Visa, Mastercard and the other networks and paid to the card-issuing bank. Every processor pays the same interchange for the same transaction. The markup is the part you can negotiate.
Is interchange-plus always cheaper than flat rate?
Not always. Very small or very low-volume businesses can sometimes do fine on a simple flat rate. For most businesses processing more than about $10,000 a month, reasonable interchange-plus pricing costs less, and it is always easier to check.
This guide is general information, not legal or financial advice. Card-brand rules and state laws change, so confirm specifics for your business.