12 Days of Payments: Interchange Plus Pricing

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On the second day of payments, my processor gave to me: interchange plus pricing.

Despite a wide variety of retail payment solutions on the market, there is only one transparent credit card processing pricing model to settle for at your business: interchange-plus pricing.

An interchange-plus pricing model is the most transparent and straightforward credit card processing model a processor can provide. The term interchange simply means cost, or, the rates that are defined by the card networks (companies like Visa or MasterCard). This rate is split between the networks and the card-issuing banks (financial institutions that issue credit cards to consumers). Every merchant – from high processing volume companies to small mom-and-pop businesses – pays interchange, and this fee only varies based on the card type your customer uses to make a purchase.

How Does It Work?

The plus in interchange plus is the cost of the card being used at your business plus a small, fixed service fee. This is the cost that the credit card processing provider is charging you to take payments. Regardless of what type of card your customers are using to make a purchase, you, the business owner, will know exactly what each transaction is costing you with this type of pricing model.

What Are the Benefits?

In comparison to other processors’ tiered pricing models, interchange plus pricing is a more desirable option for most business types. Simply put, tiered pricing plans combine a processor’s profit with the interchange rate and organize the pricing into tiers. Most of the transactions in a tiered pricing model will fall into the more expensive tiers, preventing merchants from knowing the clear, actual cost of a transaction at their business.

So, the benefit of interchange plus pricing is that it’s simple for the merchant to understand their cost of doing business. Understanding how fees are calculated for payment processing can result in continued business growth, positively impacting a merchant’s bottom line.

It’s easy to see that interchange plus pricing is the best option for business owners to understand their pricing breakdown. Payline offers interchange plus pricing to merchants as the best solution for credit card processing pricing, removing unnecessary complexities that often come from working with a payments provider.

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