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Understanding Interchange Plus: The Best Fee Structure for Credit Card Pricing

Updated: Apr 21, 2023

If you're a business owner, you know how important it is to accept credit cards payments in order to increase your sales. But did you know that there are different ways to charge for credit card processing?

Flat rate, fixed rate, and interchange plus are three common options that can make a big difference in how much you pay for credit card processing. Let's take a closer look at why we advocate for Interchange Plus pricing.

How Interchange Plus Works

Interchange plus (also known as pass-through) is a merchant service fee structure based on interchange rates. Under this system, merchants pay the actual cost of each transaction plus an additional markup fee. This means that merchants are paying exactly what they owe without any hidden fees or markups.

The Benefits of Interchange Plus

The most significant benefit of interchange plus pricing is its transparency—it allows merchants to understand exactly what they are paying for each transaction and how much their processor profits from the sale. This helps businesses budget appropriately and accurately track expenses associated with credit card payments. Additionally, because there are no extra markups or hidden fees, interchange plus often leads to lower processing costs than other models like flat rate pricing or tiered pricing.

Interchange Plus Is Ideal For Businesses That Process High Volume Transactions

Interchange plus works well for businesses that process large volumes of transactions—especially those with high average ticket sizes—because it eliminates additional markups and surcharges associated with tiered or flat rate models. That said, even small businesses can benefit from interchange plus if their average ticket size exceeds $30 or $40 per transaction.


In summary, interchange plus is the best fee structure for credit card processing because it offers merchants full transparency into their costs and eliminates extra markups and surcharges associated with tiered and flat rate models. CFOs should strongly consider using this model if their business processes large volumes of transactions with an average ticket size greater than $30 or $40 per transaction. By doing so, businesses can save money while still receiving all of the benefits that come with accepting credit cards as payment—greater customer convenience, increased sales opportunities, improved cash flow management, etc.—making interchange plus the clear winner when it comes to credit card pricing structures.


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