Interchange Rates Explained
How interchange fees work, and why interchange-plus pricing is more transparent than a flat rate.
Interchange is the fee set by card networks (Visa, Mastercard, Discover, Amex) and paid to the cardholder's issuing bank on every transaction. It's not something any processor controls — but how a processor prices on top of it determines how transparent, and how expensive, your account actually is.
What sets the interchange rate?
Interchange varies by card type (rewards cards cost more than debit), how the card was entered (swiped/tapped vs. keyed), and the merchant's industry category code. It's published by the card networks and is the same for every processor.
Interchange-plus vs. flat-rate pricing
Flat-rate processors charge one blended rate regardless of the actual interchange cost, pocketing the difference on lower-cost cards. Interchange-plus pricing passes through the real interchange cost and adds a fixed, disclosed markup — so the fee on your statement reflects what the transaction actually cost.
Reading your statement
An interchange-plus statement itemizes interchange, assessment fees, and the processor's markup as separate line items. If your current statement shows one bundled percentage with no breakdown, that's a sign you're on blended pricing.