Passthrough pricing is another name for interchange plus pricing — a processing model where the processor passes actual interchange fees and assessment fees through to the merchant at cost, then adds a transparent, fixed markup for their services.
The "passthrough" term emphasizes that the processor is passing costs through at actual network rates rather than bundling or marking up the underlying card network fees. Under passthrough pricing: - Interchange fees: Passed through at exact network rates (no markup) - Assessment fees: Passed through at exact card network rates (no markup) - Processor compensation: A fixed, disclosed markup (percentage + per-transaction fee)
This contrasts with tiered pricing, where the processor bundles costs and marks up the underlying interchange without disclosure.
Passthrough pricing is particularly common in the commercial/B2B payment space and is the pricing model that large enterprise merchants (Fortune 500 companies) consistently demand — because it's the most cost-transparent and auditable pricing structure.
Some processors use "passthrough pricing" specifically to mean they also pass through all assessment fees at cost — distinguishing themselves from processors who mark up assessments or charge "network access fees" beyond actual costs.
Passthrough pricing (interchange plus) is the most advantageous pricing model for merchants who want cost control and transparency. The key advantages: - See exactly what you pay in exchange fees vs. processor margin - Rates adjust automatically with card network fee changes - Can audit and verify your statement against published interchange tables - Processor cannot quietly raise fees by adjusting tier assignments
A merchant on passthrough pricing processes a $300 Visa Signature transaction: Statement shows: - Interchange: CPS/Retail 2 = 1.65% + $0.10 = $5.05 (paid to issuing bank) - Assessment: Visa assessment = 0.14% = $0.42 (paid to Visa) - Processor markup: 0.25% + $0.10 = $0.85 - Total processing cost: $6.32 (2.11% effective rate) Every dollar is visible, every recipient is identified.
Yes. Passthrough pricing and interchange plus (also called cost-plus or wholesale pricing) refer to the same model: actual card network costs passed through at cost, plus a transparent, fixed processor markup.
Any merchant processing over $10,000/month benefits from passthrough pricing compared to flat rate or tiered pricing. The benefits scale with volume — the higher the volume, the more meaningful the transparent, optimized pricing.
Liberty Bancard operates exclusively on passthrough pricing — we pass through all interchange and assessment fees at network cost and charge only our disclosed markup. No bundling, no tiered rate games, no hidden markup on interchange. Request our rate sheet to see exact passthrough markup.
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.