Interchange plus pricing (also called "cost plus" or "pass-through pricing") is the most transparent pricing model in payment processing. Under this model, merchants pay two separate components: the actual interchange fee set by Visa or Mastercard, plus a fixed markup charged by their payment processor.
For example, if Visa's interchange rate on a particular card is 1.65% + $0.10, and your processor charges a 0.30% + $0.10 markup, your total cost is 1.95% + $0.20 per transaction. Every line on your statement clearly shows what went to the card network versus what went to your processor.
This stands in sharp contrast to flat-rate pricing (used by Square and Stripe) or tiered pricing, where the processor bundles all fees into a single opaque rate. With interchange plus, merchants can see exactly what they're paying and why — making it the preferred choice for businesses processing more than $10,000 per month.
Interchange plus pricing became widely available to small and mid-sized businesses starting in the 2010s as processor competition intensified. Today, it is considered the gold standard for cost-effective payment processing. Businesses with a mix of credit card types (rewards cards, corporate cards, debit cards) typically benefit most from interchange plus because they naturally receive lower rates on lower-cost card types — something flat-rate pricing completely ignores.
To get the best interchange plus rates, merchants should: (1) accept cards correctly to avoid downgrades, (2) batch transactions daily, (3) provide level 2/3 data for B2B transactions, and (4) understand which card types their customers use most.
Interchange plus pricing directly affects how much of every dollar you keep. A restaurant processing $80,000/month that switches from a 2.6% flat rate to interchange plus at actual cost (averaging 1.8%) plus a 0.25% markup saves approximately $440 per month — over $5,000 per year.
The key merchant advantage is predictability. When card network fees change (which happens twice per year, in April and October), you see exactly what changed. With flat-rate pricing, you'd never know if your processor passed savings along or kept them.
Merchants with high average ticket sizes (over $50) and a mix of card types see the biggest savings. Those with primarily debit card customers may find the difference smaller, since debit interchange is regulated and already low.
A retail shop processes a $200 purchase on a Visa Signature Rewards card. Under interchange plus: - Visa interchange rate: 1.65% + $0.10 = $3.40 - Processor markup: 0.25% + $0.10 = $0.60 - Total processing cost: $4.00 (2.00% effective rate) Under flat-rate pricing at 2.6%: - Total cost: $5.20 Savings on this single transaction: $1.20. Over a month of similar transactions, the savings compound significantly.
For most businesses processing over $5,000-$10,000 per month, yes. Interchange plus gives you visibility into your actual costs and typically results in lower effective rates. Flat rate is simpler but you pay a premium for that simplicity, and the processor keeps the difference.
Request a free statement analysis. A reputable processor should show you your current effective rate and what you'd pay under their interchange plus model. The markup (the processor's portion) should typically be between 0.10%–0.50% depending on your volume.
Legitimate interchange plus markups range from 0.10% + $0.05 for high-volume merchants (over $1M/year) to 0.50% + $0.15 for smaller merchants. If a processor quotes you more than 0.75%, negotiate or shop around.
Sometimes. Square and Stripe do not offer interchange plus. If you're with a traditional ISO or bank-referred processor, ask to reprice to interchange plus — many will accommodate this to retain your business.
Liberty Bancard exclusively offers interchange plus pricing to all merchants — no tiered pricing, no flat-rate bundles, no surprises. We show you a line-by-line breakdown of what you're paying today and what you'd pay with us before you sign anything.
Our typical markup is 0.20%–0.35% depending on volume, well below industry averages. And because we're an ISO with direct access to wholesale rates, we can pass savings along that bank-referred processors can't.
Upload your most recent processing statement and we'll show you your exact interchange plus savings in 24 hours — no obligation.
Continue learning: Browse all 60 payment processing terms in our Payment Processing Glossary, or upload your statement for a free analysis of your current processing costs.