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Save with Interchange cost-plus pricing
Cost-plus pricing is one of the most fair and balanced pricing options used in the payment processing industry, largely due to how transparent it is. Cost Plus is a pricing model in which we clearly disclose the exact margin (profit) we will make for each credit card transaction we process. Complete transparency will help ensure the lowest rates for your processing.
True interchange plus pricing takes all the fees passed from the banks and card associations and passes them through to the merchant. The processor then puts a fixed and clear markup. The markup is to cover the cost of doing business including support, software development, sales, marketing, and some profit. In interchange plus, you will see pricing like interchange plus 30. This means passing through the interchange fees and adding 0.30%. The 30 mean 30 basis points, or 0.30%. An average transaction has an interchange of approximately 1.61%. This means with interchange plus 30, your rate would be around 1.91%.
The interchange fees are fees created directly by the credit card associations (Visa,Mastercard) and they can get pretty complicated. There are different rates for each type of credit card, such as the type of transaction (i.e. eCommerce, phone, etc), whether the card was in-person or not, and a collection of other factors. You can see a simplified table of interchange rates. You can also check the interchange rates out directly from Visa and MasterCard, because they are publicly available.