Reviewed by Mayer Hyman, Payments Specialist | Reviewed for accuracy July 1, 2026
Key Takeaways
- Interchange fees are set by card networks like Visa, Mastercard, and Discover, and vary by card type, transaction size, merchant category, and card-present vs. card-not-present status (Bankrate).
- The three most common pricing models in the US and Canada are flat-rate, bucket (tiered), and interchange-plus pricing, and each shifts cost and transparency differently.
- Flat-rate pricing is simple but typically most expensive per transaction; bucket pricing obscures true costs; interchange-plus passes the real interchange rate through with a transparent markup.
- Not every processor offers interchange-plus. Stripe, Square, PayPal, and Bambora/Worldline don’t; Cartis Payments does, for businesses of any size.
Credit and debit cards have become the default way most consumers in North America pay. But accepting them isn’t free, and the pricing model your processor uses for interchange fees can be the difference between predictable costs and paying more than you need to.
This guide breaks down what interchange fees are and compares the three pricing structures processors use to charge for them, so you can tell which one actually saves you money.
What Are Interchange Fees?
Interchange fees, also called interchange rates, are what a card-issuing bank charges a merchant to cover the cost and risk of processing a card transaction. They’re calculated as a percentage of each transaction, set by card networks like Visa, Mastercard, and Discover in coordination with issuing banks, and they change over time, so there’s no single “standard” rate.
The rate you actually pay depends on several factors: the card type, your merchant account’s geographic location, transaction size, your merchant category (supermarket, airline, hotel, etc.), and whether the transaction is card-present or card-not-present. How your processor’s pricing model treats these variables determines your real cost, which is why working with a provider that explains the system matters.
Flat-Rate, Bucket, or Interchange-Plus: How Do the Three Pricing Models Compare?
The three pricing structures most used in the US and Canada are flat-rate pricing, bucket pricing, and interchange-plus pricing. Each handles the underlying interchange fee differently, and the difference shows up directly in your statement.
| Pricing Model | How It Works | Best For | Main Drawback |
|---|---|---|---|
| Flat-rate | One rate for all transactions, plus a per-transaction fee | Small, low-volume businesses wanting predictability | Overpays on lower-cost transactions like debit |
| Bucket (tiered) | Transactions grouped into Qualified, Mid-Qualified, and Non-Qualified rate buckets | Processors more than merchants | Obscures true per-transaction cost |
| Interchange-plus | Actual interchange rate passed through, plus a fixed markup | Businesses of any size wanting transparency | Not offered by every processor |
Flat-Rate Pricing
Flat-rate pricing charges one rate for all transactions plus a transaction fee. It’s the model used by Stripe, Square, PayPal, Worldline/Bambora, and others.
Its advantage is simplicity: you know in advance what each transaction type costs, which makes budgeting easier. That makes it a reasonable fit for small, low-volume businesses. The tradeoff is cost. Flat-rate pricing runs more expensive per transaction than other models because it doesn’t pass through the lower interchange rates that debit cards actually qualify for. If you pay the same flat rate regardless of card type, you don’t capture the savings debit transactions should give you. Large, high-volume businesses generally have more to gain from an alternative.
Bucket Pricing
Bucket pricing, also called tiered pricing, qualified pricing, or packaged rate pricing, groups hundreds of interchange rates into three buckets based on transaction characteristics:
- Qualified – card-present, swiped transactions on cards without rewards programs. Lowest rate.
- Mid-Qualified – swiped rewards cards, or keyed-in transactions. Higher than Qualified.
- Non-Qualified – commercial cards, high-end rewards cards, international cards, and card-not-present transactions without AVS authentication. Highest rate.
Each bucket’s rate is typically set to the highest-rate card within it, plus a markup, which lets processors profit on every transaction in the bucket regardless of what that specific card’s real interchange rate is. That structure makes it genuinely hard for a merchant to know what any given transaction actually costs.
Interchange-Plus Pricing
With interchange-plus pricing, you pay the real interchange fee plus a fixed processing fee, no buckets, no rate calculations, no fine-print definitions. Rates appear on your statement, so you can calculate your exact cost per transaction rather than estimating it.
Interchange-plus tends to work out cheaper across the board, since you capture the lower interchange rates on cards that qualify for them instead of averaging everything into a flat or bucketed rate. It suits large businesses processing high dollar volumes and, contrary to the assumption that it’s only worth it at scale, is also often more affordable for small, lower-volume businesses once you account for what flat-rate pricing actually costs on lower-fee transactions.
Which Processors Actually Offer Interchange-Plus Pricing?
Interchange-plus is the most transparent way to manage card processing costs, but not every processor supports it. Many lack the technology to offer it at all, and some restrict it to companies processing $10 million or more annually. Stripe, Square, PayPal, and Bambora/Worldline don’t offer this model.
Cartis Payments is a payment processing provider, not a card network or a bank, and supports interchange-plus pricing for businesses of any size. Pricing structure is only one factor in your total processing cost. It works alongside your funding method (net vs. gross deposits) and broader shifts in interchange rates over time to determine what you actually pay to accept cards.
FAQ
What is interchange-plus pricing?
Interchange-plus pricing charges the actual interchange rate set by the card network, plus a fixed markup from your processor. It’s more transparent than flat-rate or bucket pricing because you can see exactly what you’re paying in fees versus markup.
Is interchange-plus pricing cheaper than flat-rate pricing?
Usually, yes, especially for businesses with a mix of card types. Flat-rate pricing averages all transactions into one rate, which overcharges on lower-cost cards like debit. Interchange-plus passes through the actual lower rate.
Why don’t all processors offer interchange-plus pricing?
Some processors lack the reporting infrastructure to itemize interchange rates separately from markup, and others restrict it to merchants processing $10 million or more annually. Stripe, Square, PayPal, and Bambora/Worldline don’t offer it.
Is interchange-plus pricing only worth it for large businesses?
No. While it’s the standard for high-volume merchants, smaller businesses often save money with interchange-plus once they account for how much flat-rate pricing overcharges on debit and lower-fee card transactions. Contact Cartis Payments to see what interchange-plus pricing would look like for your business.
