At Beacon Payments, we believe in transparency—and that’s why we often recommend interchange-plus pricing. In this post, we’ll break down what interchange-plus pricing is, how it works, and why it can save your business more money over time compared to other models.

What Is Interchange-Plus Pricing?

Interchange-plus pricing (sometimes called “cost-plus”) separates your processing fees into two parts:

1. Interchange Fee – A fixed fee set by the card networks (Visa, Mastercard, etc.) based on card type, transaction method, and industry.
2. Processor Markup – A fixed percentage or per-transaction fee added by your payment processor.

Example:

If the interchange fee for a transaction is 1.65% and your processor charges 0.25% + $0.10, your total cost is:
1.65% + 0.25% + $0.10 = 1.90% + $0.10 per transaction

The key benefit? Full transparency—you can see exactly what the card networks charge and what your processor is earning.

How It Compares to Other Pricing Models

🟥 Flat Rate Pricing

Flat rate pricing charges a fixed percentage (e.g., 2.9% + $0.30), no matter the type of card used. While it's simple, it often results in overpaying, especially on debit or rewards cards with lower interchange rates.

🟨 Tiered Pricing

Tiered pricing groups transactions into categories (qualified, mid-qualified, and non-qualified) with different rates. This model can be confusing and unpredictable, as many transactions end up in higher-priced tiers without clear reason.

🟩 Interchange-Plus Pricing

• Transparent and itemized
• Typically lower cost for businesses with moderate to high volume
• Easier to audit and optimize
• No surprises

5 Reasons Interchange-Plus Saves You Money Long-Term

✅ 1. Transparent Fee Structure

With interchange-plus, you know exactly what you're paying and to whom. There's no hiding markup in blended rates, and you can easily track what types of cards are costing you more.

✅ 2. Lower Costs on Debit and Regulated Cards

Debit and PIN-based transactions typically have much lower interchange rates. With flat rate pricing, you pay the same high fee regardless. Interchange-plus passes the savings directly to you.

✅ 3. Scales with Your Business

As your volume grows or your average transaction size increases, interchange-plus pricing becomes more cost-effective—especially if you're negotiating your processor markup.

✅ 4. Helps You Spot Cost-Saving Opportunities

Because every fee is itemized, you can analyze your statement to see:

• Which cards are most expensive
• Which methods (swipe, chip, online) are more cost-effective
• Whether dual pricing or surcharging could reduce your net costs even further

✅ 5. No Tier Surprises or Rate Creep

Unlike tiered pricing, interchange-plus doesn’t “reclassify” transactions into higher-cost tiers without explanation. You’ll never wonder why you’re being charged 3.5% on a basic Visa card.

Who Should Use Interchange-Plus Pricing?

Interchange-plus is especially beneficial for:

• Businesses processing over $10,000/month
• Retailers or service businesses with high average tickets
• Merchants who want full visibility into costs
• Anyone tired of confusing, opaque statements

Final Thoughts

While flat rate pricing may look simple on the surface, interchange-plus pricing often results in significant savings over time—especially for businesses that process a moderate to high volume of card transactions.

Want to see how much you could save with interchange-plus pricing?
Send us your current merchant statement, and a Beacon Payments specialist will review it for free—no obligation, just honest insights.