What is Interchange-plus pricing?

Transparent acquirer pricing model that passes interchange and scheme fees through at cost with a fixed processor markup on top.

Interchange-plus pricing is an acquiring fee structure where a merchant's cost for accepting card payments is itemised, comprising the direct costs of interchange fees and scheme fees, plus a separate, fixed markup applied by their acquirer.

The acquirer passes through the precise interchange fee levied by the card issuer, which varies based on factors such as the card type (e. g. debit, credit, premium), the transaction type (e. g. online, in-store, recurring), and the merchant category code (MCC).

Similarly, the scheme fees, set by the card schemes (e. g. Visa, Mastercard), are passed through at their exact cost, covering network processing and brand usage.

Operationally, a merchant on an interchange-plus pricing model will see these distinct components (interchange, scheme fees, and acquirer markup) clearly itemised on their monthly processing statement.

This transparency allows merchants to understand the true cost drivers behind each transaction and to track fluctuations in interchange or scheme fees.

A common mistake with interchange-plus pricing is for merchants to focus solely on the 'plus' component, overlooking the fact that the variable interchange and scheme fees often constitute the largest portion of their overall processing costs, which can still fluctuate significantly.

Interchange-plus pricing differs from acquirer markup in that the latter refers only to the acquirer's own fee, whereas interchange-plus encompasses the entire pricing model including the underlying scheme and interchange fees.