Interchange Plus Pricing Merchant accounts that operate on an interchange plus pricing structure may sound more intimidating, but they're actually much more transparent and less expensive than tiered accounts. On an interchange plus pricing structure, the merchant pays the exact interchange fee in addition to a flat markup to their merchant service provider. This eliminates inconsistent buckets and overpaying for inflated tiers.

Unlike tiered accounts that can have several different rate categories, interchange plus accounts only have two rates - the interchange markup percentage and a transaction fee.

For example, a business with an interchange plus merchant account with a rate of 0.35% and an authorization fee of $0.15 would pay the wholesale processing rate for every transaction plus 0.35% and $0.15 per transaction. The percentage part of interchange plus pricing is referred to as basis points. A basis point is equal to 1/100th of a percent.

Until recently interchange plus pricing was only available to businesses that processed high volumes of credit card sales each month - usually $25,000 or more. Increased competition in the industry has begun to make interchange pricing available to low volume and even new businesses. Web sites like CardFellow offer nothing but interchange plus and flat rate pricing quotes - even to new businesses with no prior processing history.