Interchange-Plus vs. Tiered vs. Flat-Rate Pricing
How the three common card processing pricing models work, what each one costs on the same month of sales, and which fits your business size and card mix.
By Are You Losing Money editorial team · Updated · 5 min read
Short answer
Interchange-plus passes the card networks' published costs through and adds a fixed, visible markup. Tiered pricing sorts sales into qualified, mid-qualified, and non-qualified buckets at rates the processor chooses. Flat-rate pricing charges one price for every card. Once you process steady volume, interchange-plus is usually the cheapest and the easiest to audit, while flat-rate suits very small or irregular volume.
Key takeaways
- All three models start from the same cost: interchange and network fees set by Visa, Mastercard, and the other card networks.
- Interchange-plus shows the markup as its own line, so you can see and negotiate it.
- Tiered pricing lets the processor decide which sales land in expensive buckets.
- On one example month of $30,000 in sales, flat-rate cost $244 more than interchange-plus, and tiered cost $115 more.
The cost every pricing model starts from
Every card sale carries two costs that no processor can change. The first is interchange, which goes to the bank that issued the card. The second is a set of network fees that go to Visa, Mastercard, Discover, or American Express. Visa publishes its interchange rates in a public PDF, updated about twice a year, and the most recent table took effect on April 18, 2026.
Your processor pays those costs and adds its own margin. The three pricing models are three ways of presenting that margin to you. Our guide to interchange fees explains how the underlying rates are set.
Interchange-plus pricing
Interchange-plus, sometimes called cost-plus, passes each transaction's interchange and network fees through at cost and adds a fixed markup on top. A quote might read "interchange plus 0.25% and 10 cents." That means every sale costs whatever Visa or Mastercard charges for that card, plus a quarter of a percent of the sale, plus 10 cents.
What you get: a markup you can see, compare, and negotiate. When Visa lowers a rate, you get the benefit automatically. When you take a debit card from a large bank, you pay the low regulated interchange plus your markup.
What to watch for: statements are long, and some processors label pricing as interchange-plus while adding a margin to the interchange lines themselves. Spot-check a few interchange categories on your statement against the published tables. Some accounts also carry monthly fees that matter at very low volume.
Tiered pricing
Tiered pricing groups your sales into two to four buckets, usually called qualified, mid-qualified, and non-qualified. Each bucket has one rate, and the processor decides which transactions go where.
A typical quote leads with the qualified rate, for example 1.69%. That rate often applies mainly to basic debit and non-rewards credit cards swiped or tapped in person. Rewards cards, business cards, keyed sales, and online sales tend to fall into the mid-qualified or non-qualified buckets, which might be 2.49% and 3.29%.
What you get: a short statement.
What to watch for: the processor controls the sorting, and the spread between buckets is wider than the spread in interchange. The common triggers that send sales to the expensive tiers are listed in non-qualified fees and downgrades.
Flat-rate pricing
Flat-rate pricing charges one percentage and one per-transaction fee for every card. Stripe, for example, publishes 2.7% plus 5 cents for in-person card payments and 2.9% plus 30 cents for online card payments in the U.S.
What you get: fast setup, predictable costs, and no statement to decode.
What to watch for: a debit card that costs the processor about 24 cents in interchange on a $40 sale costs you $1.13. Every low-cost card subsidizes the premium ones, so the model gets more expensive as your volume and your debit share grow.
The same month under all three models
To compare the models fairly, take one month of sales and price it three ways. The example business processes $30,000 in card sales across 600 transactions, an average of $50 each. Forty percent of the volume is debit from large banks and sixty percent is credit, with a blended credit interchange of about 1.80% plus 10 cents. Network fees are estimated at 0.14% of volume.
That month's unavoidable cost is about $461, or 1.54% of sales: $58.80 of debit interchange, $360 of credit interchange, and $42 of network fees.
| Pricing model | Terms used | Monthly cost | Effective rate |
|---|---|---|---|
| Interchange-plus | Interchange + 0.25% + 10¢ | $595.80 | 1.99% |
| Tiered | 1.69% / 2.49% / 3.29% + 10¢ | $711.00 | 2.37% |
| Flat rate | 2.7% + 5¢ | $840.00 | 2.80% |
For the tiered row, all debit and 30% of credit volume were placed in the qualified tier, 40% of credit in mid-qualified, and 30% of credit in non-qualified. Monthly account fees were left out of all three so the comparison shows pricing alone.
Over a year, the flat-rate account costs about $2,930 more than interchange-plus, and the tiered account costs about $1,380 more. Your numbers will differ with your card mix, so treat this as a method to repeat with your own statements.
Which pricing model fits which business
As a rough guide:
- Under about $5,000 a month, or very seasonal: flat-rate pricing is reasonable. The simplicity is worth something, and the dollar gap is small.
- Steady volume above roughly $5,000 to $10,000 a month: interchange-plus usually costs less. Our guide on when flat-rate processing stops making sense shows how to find your exact break-even point.
- Lots of debit cards or large tickets: interchange-plus, because flat and tiered pricing charge you far more than the regulated debit cost.
- Tiered pricing: rarely the best choice for anyone. If you are on it, ask to convert.
How to change models without changing processors
Most processors offer interchange-plus even when they do not advertise it. Ask your account manager to convert your account and to send the new pricing schedule in writing, including every monthly and annual fee. Compare your next full statement against the old one using your effective rate, because a lower markup paired with new monthly fees can cancel out the savings.
Frequently asked questions
Is interchange-plus always cheaper than flat-rate pricing?
Usually, once volume is steady. At very low volume, the monthly fees that often come with interchange-plus accounts can outweigh the savings. Compare the total monthly cost of each option on your real card mix before deciding.
What is interchange-plus-plus pricing?
Interchange-plus-plus lists card-network fees as their own line, separate from interchange, before adding the processor's markup. It shows the same costs in more detail and makes it easier to confirm that network fees are passed through at cost.
Can my processor change my markup after I sign?
Most merchant agreements allow price changes with notice, often announced in a message on your statement. Read those messages each month, and ask for a fixed markup for a set period when you negotiate.
Why does tiered pricing exist if it costs more?
It produces a simple statement and a low headline rate, which makes it easy to sell. The processor's margin is built into the gaps between the tiers, which are wider than the gaps in the underlying interchange rates.
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