Interchange-plus pricing is a credit card processing model where the merchant pays the actual card network interchange fee on every transaction, plus a transparent markup from their processor. It is the most honest way to pay for card acceptance, you see exactly what each component costs, and for most merchants doing meaningful volume, it works out cheaper than flat-rate pricing like Square's 2.6% or Stripe's 2.9%.
The two pieces of an interchange-plus fee
Every interchange-plus transaction has two distinct cost components, billed separately on your statement:
- Interchange. The fee the card-issuing bank charges to compensate for the cost and risk of issuing the card. Set by the card networks (Visa, Mastercard, Discover, American Express). Varies by card type, whether the transaction is in-person or online, your merchant category, and the size of the transaction. Typical in-person debit transactions interchange somewhere around 0.05% + a few cents. Typical premium rewards credit cards can interchange over 2.5%.
- The plus markup. What the merchant processor charges to keep the lights on and make a margin. This is the only piece the processor controls. A competitive markup for small-to-medium merchants is in the range of 0.20% to 0.50% plus a flat 10 to 20 cents per transaction. CoreGateway uses 0.50% plus 15 cents per transaction.
Total fee equals interchange plus the markup. Both are shown line-by-line on a clean interchange-plus statement, so you can see exactly where every penny went.
Interchange-plus, with nothing hidden.
CoreGateway is interchange plus 0.50% + $0.15, the same markup on every card.
How interchange-plus is different from flat-rate
Flat-rate pricing, what Square, Stripe, and PayPal use for most merchants, rolls interchange and the processor markup into one number. Square's published in-person tap rate is 2.6% + 10 cents. Stripe's online rate is 2.9% + 30 cents. The merchant pays the same rate regardless of what card the customer hands them.
That sounds simple, and it is. The catch is that flat-rate processors price their flat rate to cover the most expensive cards plus a margin. So on every cheap card (debit, low-tier credit), the merchant pays much more than the underlying interchange. That gap is the processor's profit.
Interchange-plus does not have that gap. You pay the actual interchange (cheaper on debit, more on rewards) plus the same small markup either way. As your volume grows or your card mix tilts toward debit, the savings compound.
Interchange-plus vs. flat-rate vs. tiered pricing
The three pricing models you will be quoted, side by side:
| How it works | Interchange-plus | Flat-rate | Tiered |
|---|---|---|---|
| What you pay | Real interchange plus a fixed, disclosed markup | One blended rate on every card | Cards sorted into qualified, mid, and non-qualified buckets |
| Debit cards | Low, you pay the real cheap debit rate | High, the same rate as any card | Often pushed to a higher tier |
| Premium rewards cards | Higher, but only the true cost | The same blended rate | Usually the most expensive tier |
| Statement | Interchange and markup itemized | One number hides the split | Opaque tier definitions |
| Best for | Most merchants over about 3,000 to 5,000 a month | Very low volume or simplicity first | Rarely the cheapest option |
| Typical cost | Interchange + 0.20% to 0.50% + 10 to 20 cents | 2.6% to 2.9% + 10 to 30 cents | Varies, often 2.5% to 3.5% or more |
CoreGateway prices every merchant on interchange-plus at 0.50% + 15 cents over interchange, with no tiers.
An honest example
Imagine a small business processing 10,000 dollars a month over 250 transactions, with a card mix of roughly half debit and half consumer credit.
- Flat-rate (2.6% + 10 cents per transaction): 10,000 x 0.026 = 260 in percentage fees, plus 250 x 0.10 = 25 in per-transaction fees. Total: about 285 a month.
- Interchange-plus (assume blended in-person interchange around 1.65% for this mix, plus 0.50% + 15 cents markup): 10,000 x 0.0215 = 215 in combined percentage fees, plus 250 x 0.15 = 37.50 in per-transaction fees. Total: about 252 a month.
About 33 dollars a month in savings on a small merchant, before accounting for a CoreGateway monthly platform fee. Scale that to 50,000 a month in volume and the savings can compound into hundreds of dollars per month. Actual interchange varies by card type and merchant category, the exact number depends on your real card mix.
When interchange-plus does not win
Honest answer: interchange-plus is not always the right choice. Two cases where flat-rate might be the better pick:
- Very small monthly volume. If you process under a few hundred dollars a month, the monthly platform fee that comes with most interchange-plus accounts (often 10 to 25 dollars) can eat the savings. The break-even is usually somewhere around 1,000 to 3,000 a month depending on the platform fee.
- You value extreme simplicity over the lowest cost. Flat-rate gives you one number to remember and predictable budgeting. Interchange-plus statements have more line items. Some merchants prefer the simpler bill even if they pay a little more.
For any merchant doing 5,000 a month or more, interchange-plus is almost always the cheaper option. That includes the vast majority of real small businesses.
How to read an interchange-plus statement
Three things to look for on a transparent interchange-plus statement so you know you are getting what you signed up for:
- Interchange shown separately. You should see the actual interchange charged per transaction (or summarized by category), not just one bundled rate. If the statement only shows a single percentage, you are not actually on interchange-plus, you are on a tiered or bundled plan dressed up to look like it.
- The markup clearly labeled. The processor's portion (the plus) should be a named line item, typically something like “Discount Rate” or “Platform Fee.” You should be able to read it and know exactly what you are paying for processor margin.
- Per-transaction fees broken out. The flat fee per transaction (e.g., 15 cents) should be its own line so you can verify it against your contract.
If your statement does not show those three things separately, ask your processor for an interchange-plus statement. If they will not provide one, you are not on interchange-plus pricing.
How to switch to interchange-plus
The switch is straightforward but requires going through underwriting at a new merchant account provider. Three steps:
- Apply for a new merchant account. Submit your business info, EIN, bank details, and processing history. Standard low-risk approvals happen in 1 to 3 business days.
- Integrate the new gateway. Swap your current checkout, virtual terminal, or hosted page to point at the new processor. CoreGateway provides a REST API and a hosted payment page for fast integration.
- Cut over. Migrate stored cards (if any) via the customer vault, set up recurring billing schedules, and switch your production traffic. The previous processor's account stays available as a fallback until you sunset it.
Most merchants complete the full switch within 5 to 10 business days.
Typical interchange-plus rates in 2026
There is no single interchange-plus rate, because half of it, the interchange, is set by the card networks and changes with every card type. What you can actually compare between processors is the markup, the “plus.” Here is what the two halves usually look like:
- Interchange (the pass-through half). Set by Visa, Mastercard, Discover, and American Express. In-person debit often lands near 0.05% plus a few cents. Standard consumer credit is commonly in the 1.4% to 1.9% range. Premium rewards and corporate cards can exceed 2.5%.
- The markup (the half you shop). A fair processor markup for a small-to-medium merchant is roughly 0.20% to 0.50% plus 10 to 20 cents per transaction. CoreGateway charges 0.50% plus 15 cents over interchange, with no tiers and no bundling.
Add the two halves together and a typical in-person merchant sees an effective rate well under the flat 2.6% to 2.9% that Square and Stripe charge on every card. The lower your debit mix and the higher your volume, the wider that gap gets.
Current interchange rate examples (2026)
These are typical published interchange ranges by card type, not quotes for your business. Actual rates are set by Visa and Mastercard and vary by card, channel, and merchant category. The right column shows the all-in cost once CoreGateway's transparent markup (0.50% + 15 cents) is added.
| Card type | Typical interchange | All-in with CoreGateway (+0.50% + $0.15) |
|---|---|---|
| Visa debit (regulated) | ~0.05% + $0.21 | ~0.55% + $0.36 |
| Visa / Mastercard consumer credit | ~1.5–1.8% + $0.10 | ~2.0–2.3% + $0.25 |
| Rewards / premium credit | ~2.1–2.4% + $0.10 | ~2.6–2.9% + $0.25 |
| Corporate / B2B | ~2.5% + $0.10 | ~3.0% + $0.25 |
Ranges are illustrative published interchange, not a rate quote. Debit reflects regulated (Durbin) pricing; small-issuer and unregulated debit differ. Confirm current numbers against the Visa and Mastercard interchange tables.
What interchange-plus-plus (IC++) means
You will sometimes see the model written as “interchange plus plus” or “IC++.” The second plus is not marketing. It points to a third cost that sits between interchange and the processor markup: the card network assessments.
Every card transaction really has three cost layers. Interchange is paid to the bank that issued the card. Assessments are small fees paid to Visa or Mastercard themselves, usually around 0.13% to 0.15%. The markup is your processor's disclosed margin. “Interchange-plus” and “interchange-plus-plus” describe the same honest, pass-through approach; the double plus just makes the assessment layer explicit. A clean statement shows all three.
How interchange-plus processing works, step by step
Interchange-plus is a pricing model, not a different way of moving money. The transaction flows like any card payment; what changes is how the fee is assembled. Here is a single sale, end to end:
- Authorization. The customer taps, dips, or keys in their card. Your gateway sends the request to the card network, which routes it to the issuing bank for approval.
- Interchange is assessed. The network applies the exact interchange rate for that specific card and transaction type. This is the pass-through cost, and it is identical no matter which processor you use.
- The markup is added. Your processor adds its disclosed plus, the network assessments, and the flat per-transaction fee. Nothing is bundled or rounded up.
- Settlement. Funds are batched and deposited to your bank, usually the next business day, with the fees itemized on your statement instead of skimmed off a single blended rate.
Because the interchange piece is fixed by the networks, the only thing that separates a fair processor from an expensive one is the size and honesty of that markup.
Is interchange-plus worth it for a small business?
For most small businesses, yes. The old assumption was that interchange-plus was only for large merchants with negotiating leverage. That is no longer true. Modern processors publish a flat markup and apply it to businesses of any size.
The one real break-even is volume. Because most interchange-plus accounts carry a small monthly platform fee, a business processing only a few hundred dollars a month may not clear the savings. Somewhere around 3,000 to 5,000 dollars a month in card volume, interchange-plus almost always comes out ahead of flat-rate, and the advantage grows from there. If you take a lot of debit, the case is even stronger, because flat-rate overcharges most on exactly those cheap cards.
Cost-plus pricing for dental and medical practices
Interchange-plus, often called “cost-plus” in healthcare, is a particularly good fit for dental offices, medical practices, and veterinary clinics, for three reasons:
- High average tickets. A single crown, procedure, or treatment plan can run hundreds or thousands of dollars. On a flat percentage, even a fraction of a point of overcharge on a large ticket is real money. Paying true interchange plus a small markup keeps more of each payment.
- HSA and FSA cards. Practices see a heavy mix of health-spending cards, many of which carry lower interchange. Flat-rate charges the same high percentage on them anyway; cost-plus passes the lower rate straight through.
- Card-not-present balances. Statements, payment plans, and stored-card billing are routine in a practice. A gateway with a customer vault and recurring billing, priced on interchange-plus, handles those without the flat-rate premium.
The same logic applies to any high-ticket, appointment-based business, including law firms, specialty clinics, and professional services.
Interchange-plus and your merchant account
A distinction that trips people up: interchange-plus is a pricing model, and a merchant account is the account that pricing is applied to. To accept cards on interchange-plus you need a merchant account, the bank relationship that lets you take card payments, set up on interchange-plus pricing, plus a gateway to run the transactions.
Flat-rate aggregators like Square and Stripe put you on a shared account with bundled pricing and no interchange-plus option. A dedicated merchant account, like the one CoreGateway underwrites in your business's name, can be priced on true interchange-plus. That is what lets you see interchange and markup as separate line items in the first place. Approval for a standard low-risk business usually takes 1 to 3 business days.
The bottom line
Interchange-plus pricing is the most honest credit card processing model. You pay the actual card network cost, plus a small transparent markup, and you can verify both on your statement. For most merchants doing more than a few thousand a month in card volume, it works out cheaper than flat-rate pricing like Square or Stripe.
If your current statement shows one bundled rate and no separate interchange line, you are likely paying more than you need to. Switching to interchange-plus is the most direct way to cut your processing costs without changing how your business actually accepts payments.