What is Interchange-Plus Pricing? (And Why It Saves You Money)

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If you’ve ever compared payment processors, you’ve probably seen the term “interchange-plus pricing” — and wondered what it means and whether it’s actually better than the flat-rate pricing offered by Square and Stripe.

Short answer: Yes — interchange-plus pricing is almost always cheaper for businesses processing over $10,000/month. Here’s exactly what it means and how much you could save.

Want to see the difference in real dollars? Use our free fee calculator to compare processors side by side.

What is Interchange-Plus Pricing?

Interchange-plus pricing (also called “cost-plus pricing”) is a payment processing pricing model where you pay two separate, transparent components:

1. Interchange fee — the actual wholesale cost set by card networks (Visa, Mastercard). This is non-negotiable and the same for every processor.
2. Plus markup — your processor’s fixed fee on top of interchange. This is what they actually earn.

For example, Helcim‘s interchange-plus rate is interchange + 0.40% + $0.08 per in-person transaction. If the interchange on a particular card is 1.53%, you’d pay 1.53% + 0.40% + $0.08 = roughly 1.93% + $0.08 total.

Interchange-Plus vs Flat-Rate Pricing

Most small businesses start with flat-rate processors like Square (2.6% + $0.15) or Stripe (2.9% + $0.30). These charge one simple rate regardless of the actual interchange cost of each transaction.

Why Flat-Rate Pricing Costs More

Here’s the key insight: interchange rates vary enormously by card type — from as low as 0.05% for regulated debit cards to over 2.40% for premium rewards cards.

When Square charges you a flat 2.6% on every transaction, they’re making a large profit on low-cost cards (debit cards, basic credit cards) and breaking even or losing money on high-cost cards (premium rewards cards).

Over a typical card mix, flat-rate processors pocket an extra 0.4% to 0.8% above their actual costs — that’s their profit margin on the interchange spread.

With interchange-plus, you see the actual cost of each transaction and pay only a small fixed markup — nothing hidden.

Real Cost Comparison: Interchange-Plus vs Flat-Rate

Here’s what a retail business processing $20,000/month with a typical card mix would pay:

Switching from Square to Helcim on $20,000/month saves $1,608/year. Switching from PayPal saves $3,744/year. See our guide on 7 ways to reduce your processing fees.

Interchange Rates: What You’re Actually Paying

Interchange fees are set by Visa and Mastercard and vary by card type and transaction method. Here are some common interchange rates:

With flat-rate pricing, you pay the same 2.6% whether a customer pays with a cheap debit card (where your actual cost is 0.27%) or an expensive rewards card (where your actual cost is 2.20%). The processor profits massively on debit and basic card transactions.

With interchange-plus, you pay the actual cost each time — typically saving 20-40% overall.

When is Flat-Rate Pricing Better?

Interchange-plus isn’t always the right choice. Flat-rate pricing is better when:

• Low volume: Processing under $5,000/month — the savings don’t justify the complexity
• Very small transactions: For transactions under $10, the flat per-transaction fee in interchange-plus can add up
• Predictability matters: Flat-rate makes budgeting easier — same rate every time
• Just starting out: Square and Stripe’s flat-rate simplicity is valuable when learning

Which Processors Offer Interchange-Plus?

Not all processors offer interchange-plus pricing — many prefer flat-rate because it’s more profitable for them:

Helcim is the only major processor that offers interchange-plus pricing to all businesses from day one — with no minimum volume requirements.

What is the “Plus” in Interchange-Plus?

The “plus” is your processor’s markup — what they actually earn. This is the only part that varies by processor and is negotiable:

• Helcim: + 0.40% + $0.08 (in-person) — decreases automatically with volume
• Stripe (custom): Negotiated for high-volume accounts
• Traditional merchant accounts: Typically + 0.20% to 0.50% + various fees

The lower the markup, the better the deal for you. Helcim’s markup is among the lowest in the industry.

Is Interchange-Plus Hard to Understand?

The main complaint about interchange-plus pricing is that monthly costs are harder to predict — they vary based on your customers’ card mix. Some months you process more debit cards (cheaper), other months more rewards cards (more expensive).

However, most businesses find the savings worth the variability. And with tools like our fee calculator, you can estimate your costs based on your typical card mix.

How to Switch to Interchange-Plus Pricing

1. Calculate your current effective rate — divide total monthly fees by total monthly volume
2. Get a quote from Helcim — use our fee calculator to estimate savings
3. Sign up for Helcim — no contract, free to join
4. Take advantage of the Merchant Buyout Program — Helcim covers up to $500 in switching costs from your old processor
5. Run both processors in parallel for a month to compare real costs before fully switching

Bottom Line

Interchange-plus pricing is the most transparent and typically the cheapest pricing model for businesses processing over $10,000/month. Instead of paying a flat percentage that includes hidden processor profit, you pay the actual wholesale cost plus a small, transparent markup.

For a business doing $20,000/month, switching from Square to Helcim’s interchange-plus pricing saves roughly $1,600/year — money that goes straight back into your business.

Use our free fee calculator to see your personalized savings, or compare all processors side by side.

Frequently Asked Questions: Interchange-Plus Pricing