Pricing
Interchange Plus Plus (IC++)
Definition
Interchange Plus Plus (IC++) the most transparent pricing model in payments, breaking costs into three components: actual interchange (paid to issuer), scheme fees (paid to card networks), and acquirer markup (the processor's profit). Merchants see exactly what each transaction costs and can optimize accordingly. IC++ typically benefits larger merchants ($100K+/month) with diverse card mixes and becomes available at higher volumes.
Related Terms
Interchange Fee
The fee paid by the acquiring bank to the issuing bank each time a card transaction is processed. Set by card networks (Visa, Mastercard), interchange varies based on card type (debit vs credit, rewards vs standard), merchant category code, transaction type (card-present vs card-not-present), and geography. Interchange typically represents the largest component of payment processing costs, ranging from 0.2% for regulated debit to 2%+ for premium rewards cards.
Scheme Fees
Fees charged by card networks (Visa, Mastercard) for various services beyond the basic assessment. Includes authorization fees, clearing fees, cross-border fees, data usage fees, and program fees. Scheme fees have grown significantly in recent years and can add 0.1-0.3% to transaction costs depending on geography and transaction characteristics. Often bundled or passed through as part of IC++ pricing.
Acquirer Markup
The fee charged by the acquiring bank or payment processor for their services, representing their profit margin on transactions. In IC++ pricing, this is the only negotiable component. Typically expressed as a percentage plus fixed fee (e.g., 0.2% + $0.10). Markup varies by merchant risk, volume, vertical, and competitive factors.
Blended Rate
A pricing model where the acquirer charges a single flat percentage for all transactions regardless of card type or interchange category. Simple to understand but often more expensive than IC++ for merchants with diverse card mixes. The acquirer calculates an average rate and takes margin on the spread between actual interchange and the blended rate charged. Common with PayFacs and mainstream PSPs targeting smaller merchants.
See Also
Need help navigating payment terminology?
We speak fluent payments. Let us translate for your business.
Talk to Us