Interchange Plus Pricing vs. Flat Rate: Which Is Better for Your Business?

Interchange plus and flat-rate pricing are two fundamentally different approaches to payment processing costs. A $30,000/month example shows exactly which model saves more — and when flat-rate might still make sense.

By Liberty Bancard Team • February 5, 2025 • 11 min read

The pricing model you choose determines how much you pay on every single transaction. Understanding interchange-plus versus flat-rate isn't academic — it directly impacts your bottom line.

What Is Flat-Rate Pricing?

Flat-rate pricing charges the same percentage on every transaction. Square: 2.6% + $0.10. Stripe: 2.9% + $0.30. Simple and predictable — but expensive at scale.

What Is Interchange-Plus Pricing?

Interchange-plus separates the card network's actual interchange fee from your processor's markup. Both are clearly visible on your statement. You pay the real cost of each card type plus a transparent processor markup.

The $30,000/Month Example

For a retail business processing $30,000/month with a typical card mix (40% debit, 35% standard credit, 25% rewards credit), flat-rate at 2.6% + $0.10 costs approximately $847/month. Interchange-plus pricing with a 0.25% markup costs approximately $540–$580/month — saving $267–$307/month, or roughly $3,200–$3,700 annually.

When Flat-Rate Makes Sense

Volume under $3,000–$5,000 per month
Occasional or seasonal sellers
Very high-ticket averages where simplicity outweighs cost

When Interchange-Plus Is Clearly Better

Any business processing more than $5,000/month
Businesses with significant debit card volume
Restaurants, retail, and in-person merchants
Merchants who want transparency into their costs

See how interchange-plus pricing compares to what you pay now. Upload your statement for a free comparison.

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Frequently Asked Questions

Is interchange plus always cheaper than flat rate?

For businesses processing more than $5,000/month, interchange-plus is almost always cheaper. The main driver is debit cards — regulated debit interchange is capped very low, but flat-rate processors charge the same percentage on every transaction.

What does 'interchange plus 0.25%' mean?

Your processor charges the actual card network interchange cost (which varies by card type) plus an additional 0.25% markup. If interchange on a card is 1.65%, you pay 1.90% total. If interchange on a debit card is 0.05%, you pay 0.30% total.