How Interchange Plus Pricing Works?

KEY TAKEAWAYS

Interchange-plus (IC++) is the most transparent way to pay for card processing: you pay the card networks’ base cost (interchange + assessments) plus a small processor markup. That markup has two parts—basis points (a tiny percentage) and a per-transaction cents amount. This guide explains how IC++ works, who benefits most, what markup to ask for in writing, and the best providers to consider in 2025.

Credit card acceptance is rarely inexpensive, but it isn't usually confusing either. In 2025, Interchange Plus (IC++) is still the most transparent way to price card acceptance. Below, we go through how it works, what is new this year, and how to determine if IC++ is best for your business. We'll also provide you with the table, which should allow you to simply assess your current credit card acceptance situation against IC++.

How Interchange‑Plus Works

When completing a card transaction there are three layers of cost involved:

Interchange – the base fee that is charged by Visa, Mastercard, etc. This can vary based on the type of card used, how the card is entered, and the industry you are in.
Assessment – small network fees tacked on by the card brands for the transaction.
Processor markup – this is the negotiable layer. When it is quoted, it is usually represented in both basis points (a fraction of a percent) + a flat cent amount per transaction.

With IC++, both the interchange and assessment fees are passed through directly and are shown to you line by line. The only markup item is the one that goes to your processor. This creates transparency that enables you to compare processors more easily!

Why It Matters in 2025

Changes in rules: Visa limits credit surcharges to 3%, Mastercard limits them to 4%, and there can be no surcharge on debit. States like California and Minnesota require businesses to show the full price including any fees added. This has led to more merchants displaying dual pricing (cash versus card), rather than point-of-sale hidden surcharges.
Business impact: Merchants that have a higher debit share and B2B Level 2/3 data will benefit the most. Very small and micro-ticket merchants might still prefer flat-rate simplicity.

For details, see our guides on Surcharging vs. Dual Pricing and PCI DSS v4.0.

Benchmarking Table: Comparison of Effective Rates

This table can help you assess whether Interchange‑Plus is suitable for your business. Start by determining your effective rate (total fees ÷ gross volume), then compare your results.

Business Type	Typical Mix	Expected Effective Rate (IC++)	Flat‑Rate Equivalent	What to Watch
Retail with strong debit	60-70% regulated debit, average ticket $40–$60	2.1% – 2.6%	Normally 2.9% + 30¢	Guarantee EMV/contactless, same-day deposit.
E‑commerce store	90% credit, average ticket $80-$120	2.6% – 3.2%	2.9% + 30¢	Invest in fraud protection, AVS, 3-D Secure.
B2B/Wholesale	High corporate or purchasing cards, average ticket $500 +	2.1% – 2.5% (with Level 2/3)	Normally 3% above	Acquire tax & invoice information for L2/L3 benefit.
Low volume / micro‑ticket	Many sales under $10	Can be >3% with per‑item fees	Flat 2.6–2.9% may gain.	Compare thoroughly, remember FANF and per item cost.

Practical Steps for Merchants

Run the numbers. Use our Payment Calculator to check your effective rate under IC++, flat-rate, or membership pricing.
Know your tools. Do you need Credit Card Machine, and Mobile Reader, or Online Payment Gateway. Choosing the proper set up matters with your total cost.
Compare providers. Check out our Processor Reviews, and Square Alternatives to see how major names do IC++.
Audit contracts. Audit agreements. Look for a simple annex that shows markup in X bps + $Y/txn and a complete list of monthly fees. Avoid long term leases and unknown “bundled” charges.

The Summary

Interchange‑Plus is not a miracle, it simply allows you to distinguish your unavoidable charges around actual network costs rather than what your processor charges you. This kind of transparency often means, for most merchants, lower effective rates and fewer surprises for they are able to know their costs which take the guessing out of whether they are better than before. There is usually some value for the very small, or businesses with inconsistent sales volume, in the flat rate simplicity of the costs. The key insight is your ability to model whichever you choose to engage in and use your own data to consider the two.

Use the Credit Card Processing Guide and Comparison Tool to model your costs and make a choice based on your volume needs, industry and growth plans.

FAQs

Is IC++ always less expensive than flat-rate?

Not necessarily. For consistent volume levels, and if you have a large enough share of debit, then typically you will see a lower overall cost from either IC++ or a membership or wholesale model.

What markup should I aim for?

There is not a single answer. Ask providers to quote markup as X bps + $Y per transaction, then make your own comparisons based on your average ticket size, debit share, and online vs. in-store transaction mix.

Can I get next-day funding for IC++ transactions?

Yes. Funding speed is independent from pricing. Be sure to clarify batch cut-off times, weekend transactions and bank deposit policies with your processor.

Will I need a gateway for in-store transactions?

No, for retail in-person only. The gateway is only needed to process online or recurring payments.

How will I compare IC++ to a membership model?

Take your effective rate for both over 1-2 full months on each quote, accounting for all monthly fees. Membership models typically win at higher, stable volumes, while IC++ can be a better fit with mixed or smaller ticket sizes.

May I implement dual pricing or surcharging with IC++?

You can only use this for credit cards. Visa caps surcharges at 3%, whereas Mastercard has a 4% surcharge cap. Debit and prepaid cards cannot be surcharged at all. You are required to provide clear disclosure of pricing before any payment is processed.

What’s Level 2/3, and why is it significant for B2B?

Level 2/3 refers to additional data fields - tax, invoice number, and line items - that lower interchange rates for corporate or purchasing cards. This can represent significant savings for B2B merchants.

How do I understand if I am overpaying currently?

Take your last three months’ transaction processing, and calculate your effective rate (total fees ÷ volume), then compare your effective rate with the category benchmarks in the above table. If your effective rate is above the benchmarks in the above table, IC++ may be beneficial.

How do I get started taking cards online?

You need a merchant account and an online payment gateway. Get set up with both through a provider, and be sure to have clear and transparent terms.

What equipment should I use for card processing?

If you are doing countertop sales with checkout, use a terminal; if you are going to be doing mobile sales or in the field, use a reader/swiper; and if you are going to be doing retail business and need scanning, use a reader-scanner. The key is to be certain it is EMV/contactless compatible with your processor.

Interchange Plus Credit Card Processing (2025): Transparent Pricing Made Simple