The short answer
Interchange-plus (sometimes written IC+ or cost-plus) is a pricing model where the processor separates two line items on your statement: (1) the actual interchange fee the card networks charge them, passed through at cost, and (2) a fixed markup that is the processor's margin. You know exactly what your processor is making, and you benefit directly when cheap cards (debit) run through your volume.
How it compares to flat-rate
- Flat-rate (Stripe, Square, PayPal standard pricing): 2.9% + $0.30 on every card, regardless of whether the customer used a debit card (cheap to process) or a rewards credit card (expensive to process). Simple to understand. Profitable for the processor on low-cost cards.
- Interchange-plus: Interchange varies by card (1.65%-2.60%+ plus network assessments), and your processor adds a flat markup on top, often 0.20%-0.50% + $0.10 per transaction. Harder to estimate in advance but you get the benefit of every cheap transaction instead of paying a blended average.
When interchange-plus wins
- High volume ($50k+/mo): You become attractive enough for processors to offer IC+. Below that, most will only quote flat-rate.
- Debit-heavy card mix: If a meaningful share of your volume is debit cards, IC+ captures the savings (debit interchange is capped by the Durbin Amendment around $0.21 + 0.05%).
- You have time to read a statement: IC+ statements have more line items. If you're going to let invoices pile up unchecked, flat-rate's predictability is worth the premium.
- Multi-brand operators: multiflow typically negotiates IC+ on your behalf once consolidated volume crosses the acquirer's threshold. The savings relative to flat-rate at $100k+/mo fund the orchestration fee outright.
Numbers to know
Typical IC+ markup for a healthy e-commerce merchant: 0.25% + $0.10 per transaction on top of interchange. On $100k/mo in volume averaging $85 per order: ~1,176 transactions × $0.10 = $117.60, plus 0.25% × $100,000 = $250. Total processor margin: $367.60 for the month. Interchange itself is an additional 1.8-2.2% ($1,800-$2,200) paid to issuing banks. Effective rate: ~2.5%.
On flat-rate 2.9% + $0.30 for the same volume: $2,900 + $352.80 = $3,252.80. Difference: roughly $700/mo savings on IC+ at this volume.
Questions to ask your processor
- Are you quoting me flat-rate or interchange-plus? (If they dodge, it's flat-rate with a margin you can't see.)
- What's the exact markup over interchange — percentage and per-transaction?
- Is there a monthly minimum? A statement fee? A PCI fee? A chargeback fee? IC+ statements often come with hidden line items.
- Does the markup change based on card type (downgrade fees), and how?