Interchange-Plus happens to be a pricing model implemented by credit card processors. It helps determine the cost that merchants pay on a per transaction basis. This pricing model involves two components:
Interchange-plus pricing is among the most balanced fair pricing models used in the PPI or Payment Processing Industry. This is a highly transparent scheme.
Interchange Plus Pricing in Merchant Services
In the payment processing industry, the Interchange Plus Pricing is among the most in-demand merchant account pricing models - due to its lower cost potential and high level of transparency. As its name indicates, it works by applying a fixed markup to the interchange fees of networks like Discover, MasterCard or Visa.
The markup that is applicable to a credit card based transaction frequently comprises of two components:
The interchange transaction category and the final charge amount are determined by the card type being used - whether business, personal, credit or debit; how the card processing is done - machine swiping, online etc, and other variables.
The same markup is assessed to a transaction irrespective of which category of interchange a transaction is eligible for.
The merchant discount fee is the cost of a merchant for processing a transaction and it is constituted of markup and the interchange costs.
Where is Interchange Plus Pricing Available?
You can come across a processor who can offer interchange plus to you. Only, you have to keep looking for it. Keep in mind that Interchange Plus is not offered by all payment processors out there. Many of the processors lack proper systems to offer interchange plus pricing as well. It is offered by some processors only to big merchants who process transactions worth more than 10, 000,000 USD.
In the Credit Card processing industry, Interchange Plus pricing is the friendliest pricing model for merchants. Typically, it is more cost-efficient than Fixed Pricing - particularly for merchants for businesses having customers, who mainly use debit cards for payments. The Fixed Pricing model generally charges more for such transactions, due to the fact that assessment and interchange fees are very low on debit cards. With Fixed Pricing plans, monthly transaction costs can be predicted accurately. But interchange plus pricing comes cheaper. Also, you will not encounter the problem of unexpected fees in this kind of pricing model.
