Understanding Interchange Plus Pricing
Transparent Payment Processing with Asheville Merchant Advocates
What is Interchange Plus Pricing?
Interchange Plus pricing is a transparent payment processing model where merchants pay the exact interchange fees set by card networks (e.g., Visa, Mastercard) plus a fixed markup from the processor. Unlike other pricing models, Interchange Plus clearly separates the card network fees from the processor’s fees, ensuring you know exactly what you’re paying for each transaction. This transparency helps businesses save money and make informed decisions about their payment processing.
Interchange Plus vs. Tiered (Bucket) Pricing
Tiered pricing, also known as bucket pricing, groups transactions into categories like Qualified, Mid-Qualified, and Non-Qualified, each with a different rate. This model often obscures the true cost of processing, especially for low-cost transactions like debit cards, as processors may place them in higher-rate tiers to increase profits. Interchange Plus, by contrast, passes through the actual interchange rates, ensuring fair and predictable costs.
Debit card transactions, for example, typically have lower interchange rates (often 0.5%–1% + $0.10–$0.22) compared to credit cards (1.5%–3% + $0.10–$0.30). With tiered pricing, debit card transactions may be charged at a higher “Non-Qualified” rate, inflating costs. Interchange Plus ensures you benefit from the lower debit card rates, saving you money.
Card Types and Their Costs
Different card types have varying interchange rates, which directly impact your processing costs. Here’s a breakdown of common card types and their typical interchange fees (as of 2025, based on Visa and Mastercard rates):
| Card Type | Description | Typical Interchange Rate |
|---|---|---|
| Debit Card (Regulated) | Issued by banks, often PIN-based, with rates capped by regulation (e.g., Durbin Amendment for large banks). | 0.05% + $0.21 (capped) |
| Debit Card (Unregulated) | Issued by smaller banks or credit unions, not subject to federal caps. | 0.8%–1.2% + $0.15–$0.25 |
| Standard Credit Card | Basic credit cards (e.g., Visa Classic, Mastercard Standard) with no rewards. | 1.5%–2.0% + $0.10 |
| Rewards Credit Card | Cards offering cashback, points, or miles, which carry higher fees due to rewards programs. | 2.0%–2.5% + $0.10–$0.20 |
| Premium/Business Card | High-end cards (e.g., Visa Signature, World Elite Mastercard) used for business or luxury perks. | 2.5%–3.0% + $0.10–$0.30 |
Why Debit Cards Matter: Regulated debit cards have some of the lowest interchange rates, making them cost-effective for merchants. With Interchange Plus, you pay these low rates directly, whereas tiered pricing may lump debit transactions into higher tiers, erasing potential savings.
Why Choose Asheville Merchant Advocates?
At Asheville Merchant Advocates, we prioritize transparency with Interchange Plus pricing, ensuring you pay only the true cost of processing plus a clear, fixed markup. Unlike processors using tiered or bucket pricing, we don’t hide fees or inflate costs for low-rate transactions like debit cards. Our approach includes:
- Transparent Pricing: See exactly what you pay with detailed statements breaking down interchange and processor fees.
- Cost Savings: Benefit from lower debit card rates and avoid overpaying for transactions misclassified in tiered models.
- Expert Support: Get guidance on optimizing your payment processing and complying with Visa, Mastercard, and state regulations.
- Customized Solutions: Tailored POS systems and clear signage to enhance your customer experience.
Switch to Asheville Merchant Advocates for fair, transparent pricing that saves you money. Contact us today to learn how Interchange Plus can benefit your business!
Get Started with Asheville Merchant AdvocatesInterchange Plus vs. Tiered Pricing at a Glance
| Aspect | Interchange Plus | Tiered (Bucket) Pricing |
|---|---|---|
| Transparency | Highly transparent; shows exact interchange fees plus a fixed processor markup. | Low transparency; groups transactions into tiers, obscuring true costs. |
| Cost for Debit Cards | Pays low interchange rates (e.g., 0.05% + $0.21 for regulated debit), saving money. | Often charges higher rates (e.g., Non-Qualified tier) for debit cards, increasing costs. |
| Predictability | Predictable costs based on card type and fixed markup. | Unpredictable; rates vary by tier, which processors can manipulate. |
| Best For | Businesses seeking clarity, cost savings, and fairness in processing fees. | Businesses with low transaction volumes that don’t prioritize cost analysis (not recommended). |