Interchange-Plus Pricing

Interchange-plus pricing is the standard model for sophisticated payment operators and large merchants because it provides visibility into the actual cost structure of card acceptance, enabling meaningful benchmarking and negotiation. Its alternative — blended pricing — bundles interchange, scheme fees, and acquirer margin into a single flat rate, obscuring the underlying cost components.

How the Pricing Model Works

Under interchange-plus, a merchant’s per-transaction cost has three components:

1. Interchange: Set by Visa or Mastercard based on card type, transaction environment, and MCC. Passes through at the rate published in the card networks’ interchange rate tables.

2. Scheme fees: Assessment fees, processing fees, and network access fees charged by Visa and Mastercard. These also pass through at cost, often itemised separately in processing statements.

3. Acquirer margin: The acquirer or PSP’s charge, stated as a fixed basis-point spread (e.g., 15 bps) or per-transaction fee, or both.

Because interchange and scheme fees vary by transaction, the total MDR for any given transaction varies — a Visa Infinite card-not-present transaction costs more than a Visa Classic card-present transaction. The acquirer margin is the only fixed component.

Volume Thresholds and Typical Margins

Interchange-plus pricing is typically accessible from approximately $50,000 per month in processing volume, at which point acquirers will quote margins in the 0.30–0.50% range. Merchants processing above $500,000 per month can negotiate margins below 0.25%. At $10M+ per month, sub-0.20% margins are achievable from major acquirers, with enterprise deals often structured as per-transaction fees (e.g., $0.04–0.08 per transaction) rather than percentage margins.

Why Operators Prefer Interchange-Plus

The primary advantage is visibility and control. Under blended pricing, a merchant has no way to verify whether their card mix justifies the blended rate they are paying. Under interchange-plus, every component is auditable against published rate tables. This enables operators to identify high-cost card types in their volume, make informed decisions about card acceptance scope, and negotiate acquirer margins independently of interchange — which is non-negotiable in any model.