Interchange Plus vs. Flat Rate: Which Pricing Model Costs You More?
Two of the most common pricing structures explained side by side so you can see which one fits your business.
Two pricing structures dominate the merchant processing market: interchange plus and flat rate. Understanding the difference could save your business hundreds — or thousands — of dollars each year.
What is flat-rate pricing?
Flat-rate processors like Square or Stripe charge a single, predictable percentage on every transaction — typically 2.6%–2.9% plus a per-transaction fee. Simple to understand, easy to budget, and the right choice for very low-volume businesses or pop-up sellers.
The catch: you pay the same rate on a basic debit card as you do on a premium rewards card, even though the actual interchange cost on a debit card can be as low as 0.05%. The processor pockets that difference on every single transaction.
What is interchange-plus pricing?
Interchange plus passes through the actual network cost (interchange) and charges a small fixed markup on top — for example, interchange + 0.25% + $0.10 per transaction. You see exactly what Visa and Mastercard charge and exactly what your processor adds.
For any business processing more than $5,000 per month, interchange plus almost always wins. As your volume grows and your card mix skews toward lower-cost debit and standard cards, the savings widen further. Businesses processing $50,000/month often save $200–$500 compared to equivalent flat-rate pricing.
Which one is right for you?
It depends on your processing volume and card mix — upload your current statement and our analyzer will identify your current pricing model, calculate your effective rate, and show you whether a switch would produce meaningful savings for your specific business.
