What is Interchange++ Pricing?
Interchange++ (IC++) is the most transparent pricing model in payments. Here's how it works and why it matters.
The Three Components
Interchange++ (also called IC++) breaks down your processing cost into three separate components:
1. Interchange
The fee paid to the card issuing bank. This is set by card networks (Visa, Mastercard) and varies by:
- Card type (debit vs credit, rewards vs standard)
- Transaction type (card present vs not present)
- Merchant category
- Geography (domestic vs international)
2. Scheme Fees
The fee paid to the card network (Visa, Mastercard). These cover network services, brand licensing, and various transaction-related charges.
3. Acquirer Markup
The fee your payment processor charges. This is the only negotiable component and represents their margin.
Why IC++ is Better
Transparency
You see exactly where your money goes. No hidden fees buried in "blended" rates.
Fair Pricing
You pay actual interchange, not padded rates. Debit cards cost less than premium rewards cards, and you see the difference.
Optimization Opportunity
With visibility into interchange, you can optimize your transaction mix. Encouraging debit, improving data quality, or changing checkout flows can reduce costs.
IC++ vs Blended Pricing
Blended pricing (like "2.9% + $0.30") simplifies things but hides information. The PSP calculates an average rate and takes the margin on the difference. You might be overpaying on low-interchange transactions.
When IC++ Makes Sense
- Processing significant volume ($100K+/month)
- Diverse card mix (debit and credit)
- International transactions
- Want to optimize processing costs
Key Takeaways
- IC++ = Interchange + Scheme Fees + Acquirer Markup
- Most transparent pricing model available
- You pay actual interchange, not padded rates
- Makes sense for larger merchants with diverse card mix
- Enables cost optimization
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