---
title: "Interchange-Plus Pricing"
url: "https://mahouse.world/glossary/interchange-plus-pricing"
type: "glossary term"
topic: "Payments pricing"
author: "Ihor Vlasov"
reviewed: "2026-09-20"
published: "2026-08-10"
---

# Interchange-Plus Pricing

Interchange-plus pricing charges a merchant the actual interchange fee and scheme fees on each transaction, passed through at cost, plus the acquirer's own margin stated separately — so that the merchant can see what goes to the issuer, what goes to the network and what the acquirer keeps. It is the transparent alternative to a blended rate, the norm for larger merchants, and the pricing model that made acquiring margins visible and therefore competitive.

**Also known as:** Interchange++, IC+, Interchange plus plus, Cost-plus pricing

## Key facts

- **Used at:** merchant contracts above a few million of annual card volume; increasingly for smaller merchants as a competitive offer; and in every merchant's negotiation once they know it exists
- **Binding:** yes — the merchant agreement states the margin (in basis points and a per-transaction fee) and defines the pass-through costs by reference to the schemes' published tables
- **Typical margin:** 5–30 basis points plus €0.02–0.10 per transaction for mid-sized merchants; under 5 basis points for the largest; against a blended rate whose implied margin may be 50–150 basis points
- **Typical statement:** a monthly invoice with interchange, scheme fees and margin as separate lines, by card type — which is also the merchant's tool for checking the acquirer
- **Parties:** the merchant, the acquirer, and — as sources of the pass-through cost — the card networks and issuers

## How interchange-plus pricing works in practice

A merchant on a blended rate pays 1.6% on every card transaction and sees one number. Behind it, the acquirer pays interchange that varies from 0.2% on a European consumer debit card to 2% or more on a US commercial card, plus scheme fees of a few basis points, and keeps whatever is left — which on a low-interchange debit transaction is most of the 1.6%. Interchange-plus takes the blend apart: the merchant pays interchange as the schemes set it, scheme fees as the schemes charge them, and an agreed margin on top. The same debit transaction now costs the merchant 0.2% + 0.03% + 0.10% — a third of the blended price — and the same commercial card costs more than 1.6%, because it is dearer to acquire.

The model does two things to the market. It rewards the merchant that understands its card mix — a supermarket with mostly domestic debit cards saves a lot; a travel agent with foreign commercial cards may not — and it turns the acquirer's margin into a single number that a competitor can undercut. That is why acquiring commoditized: once the margin was a line on the invoice, the sales conversation became about basis points, and scale became the only lever. Acquirers respond by bundling — software, reporting, fraud tools, faster settlement — so that the margin buys something the merchant will not compare.

For a buyer of an acquiring business, the contract mix matters: blended contracts carry hidden margin that a merchant's next procurement exercise will remove; interchange-plus contracts carry visible margin that a competitor already has.

## Example

A retailer processes €50m a year, 70% on domestic consumer debit (interchange 0.2%), 25% on consumer credit (0.3%) and 5% on commercial and foreign cards (average 1.8%). On a blended 1.4% it pays €700,000. On interchange-plus at 0.12% plus €0.05 per transaction (2m transactions), it pays: interchange €50m × (0.7 × 0.2% + 0.25 × 0.3% + 0.05 × 1.8%) = €152,500; scheme fees at 0.04%, €20,000; margin €60,000 + €100,000. Total €332,500 — €367,500 less than the blend, of which the acquirer had kept most. The acquirer, asked to move the retailer to interchange-plus or lose it, moves it and loses €300,000 of margin on one account; a buyer of the acquirer, reading its contract mix, prices the same repricing across the book.

## Common mistakes

- Merchants comparing a blended rate with an interchange-plus margin as if they were the same kind of number.
- Interchange-plus with the pass-through costs "estimated" by the acquirer rather than taken from the schemes' tables.
- Acquirers moving a whole book to interchange-plus and discovering how much margin the blend had hidden.
- Small merchants on interchange-plus with a high per-transaction fee that costs more than the blend on low tickets.
- Buyers valuing an acquiring book on today's blended margin in a market where every renewal is an interchange-plus negotiation.

## Related terms

- [Interchange Fee](https://mahouse.world/glossary/interchange-fee.md)
- [Blended Pricing](https://mahouse.world/glossary/blended-pricing.md)
- [Tiered Pricing](https://mahouse.world/glossary/tiered-pricing.md)
- [Scheme Fee](https://mahouse.world/glossary/scheme-fee.md)
- [Merchant Discount Rate](https://mahouse.world/glossary/merchant-discount-rate.md)
- [Commoditization](https://mahouse.world/glossary/commoditization.md)

— Ihor Vlasov, M&A FinTech Expert. Last reviewed 2026-09-20. https://mahouse.world/authors/ihor-vlasov