Interchange Plus Pricing for Merchant Services
Curious about how interchange plus pricing for merchant services works? What about interchange plus rates and your interchange plus pricing model?
In this article, we’ll unpack interchange plus rates to help you get a better understanding of what you’re actually paying for.
What is interchange plus?
Interchange plus (or Interchange ++) is the fixed fee that is given to the card issuer for every transaction processed.
How are interchange plus rates regulated?
While the EU has sought to standardise interchange plus pricing for merchant services, there are still many variable rates and fees that apply based on the criteria around the individual transaction. These rates are regulated by each individual state within the EU and also for cross-border transactions or Intra European transactions by the card schemes centrally. As such, these rates still change and are updated periodically.
For the most up to date current rates please visit the website of your relative card scheme, where these rates will be published.
Card scheme fees
These are the charges levied by the card schemes on the acquiring member. So for each acquirer who holds membership or a licence to process cards from the schemes, there are charges levied for every transaction processed. There are additional and multiple fees that relate to the types of transactions processed. In general, the basis for these fees and the rates charged are based on the volume of processing that the member or licence holder has with the individual card scheme.
Processing value and clearing volume
- These are applied to every transaction – processed at a % for value and a per item cost for volume.
- So every transaction has a base cost of both a % and a per-item cost.
These are the charges agreed to with your acquiring bank and usually come in the form of an ad valorum % rate. They represent the cost of the service provided, relative to the authorisation capture and subsequent funding of transactions processed on behalf of the merchant.
Cost plus pricing card
Cost plus pricing is the transparent pass-through of each of the cost elements as outlined above, while the elements in relation to the interchange and card scheme fees may vary depending on a number of factors the acquiring charge (charge amount) element will remain fixed as per your agreement.
A smarter merchant services solution
Taking these charges into account, how much are you actually paying for your merchant services? We bet that with our transparent pricing (no hidden fees!), you’ll be able to save on your merchant services. In fact, when we compared our costs to those of another merchant services provider and found that we could save the merchant 90% on their merchant services fees.