What Is Interchange?
Every time a customer swipes, dips, or taps a credit or debit card at your business, a small fee is collected behind the scenes. That fee is called an interchange fee — and it's the foundation of every credit card processing cost you pay.
Interchange fees are set by the card networks — Visa, Mastercard, Discover, and American Express — and paid to the cardholder's bank (the issuing bank). They are not set by your payment processor. They are non-negotiable and the same for every processor in the industry.
Who Gets the Interchange Fee?
Interchange rates vary based on several factors including the type of card used (rewards cards cost more), how the card is presented (card-present vs. card-not-present), the merchant category code (MCC), and the transaction amount. Visa alone publishes hundreds of interchange rate categories.
Typical Interchange Rate Ranges
| Card Type | Transaction Type | Typical Rate |
|---|---|---|
| Visa Debit (Durbin) | Card Present | 0.05% + $0.22 |
| Visa Credit (Standard) | Card Present | 1.51% + $0.10 |
| Visa Credit (Rewards) | Card Not Present | 1.95% + $0.10 |
| Mastercard Business | Card Not Present | 2.65% + $0.10 |
| Visa Signature Rewards | Card Not Present | 2.40% + $0.10 |
Rates are approximate and subject to change. Contact START for current rates applicable to your business type.
What Is Interchange Plus Pricing — and Why Is It Best for Your Business?
Interchange Plus pricing (also called "cost-plus" or "pass-through" pricing) is the most transparent and typically the lowest-cost pricing model available to merchants. Here's how it works:
Interchange Plus Formula:
Interchange Rate + Processor Markup = Your Rate
Example: 1.80% interchange + 0.20% markup + $0.10 = 2.00% + $0.10 per transaction
With interchange plus, the actual interchange rate — whatever Visa or Mastercard charges — is passed through to you at cost. Your processor then adds a fixed, transparent markup on top. That's it. No guessing, no bundling, no surprises.
Why Interchange Plus Wins
Full Transparency
Your statement shows exactly what Visa/Mastercard charged and exactly what your processor charged — separately.
You Benefit from Lower Rates
When a customer pays with a basic debit card (lower interchange), you pay less. With tiered pricing, your processor keeps that savings.
Durbin Debit Savings
Regulated debit cards carry some of the lowest interchange rates available (as low as 0.05% + $0.22). Interchange plus passes those savings directly to you.
Easy to Audit
Because every cost is itemized, you can verify your statement against published interchange tables. No hidden markup possible.
Interchange plus is the pricing model used by sophisticated merchants who process high volumes — and it's the only model START offers. We believe you deserve to know exactly what you're paying and why.
Interchange Plus vs. Tiered Pricing: The Real Cost Difference
Tiered pricing is the most common pricing model offered by processors — and the one that costs merchants the most. Understanding the difference could save your business thousands of dollars per year.
How Tiered Pricing Works
Tiered pricing bundles all interchange categories into three "buckets" — Qualified, Mid-Qualified, and Non-Qualified — each with a different rate. The processor decides which transactions fall into which bucket, and the rules are rarely disclosed.
| Tier | What Goes Here | Typical Rate |
|---|---|---|
| Qualified | Basic swiped consumer credit cards — the cheapest interchange categories | ~1.79% |
| Mid-Qualified | Keyed-in transactions, some rewards cards, business cards | ~2.30% |
| Non-Qualified | Premium rewards cards, corporate cards, international cards, most eCommerce transactions | ~3.25%+ |
The Problem with Tiered Pricing
For eCommerce merchants, most transactions land in the Non-Qualified tier — the most expensive bucket — because cards aren't physically present. Your processor advertises the low "Qualified" rate in marketing materials, but the majority of your volume is charged at the highest rate. This is intentional.
Side-by-Side Comparison
| Interchange Plus | Tiered Pricing | |
|---|---|---|
| Transparency | ✓ Full itemization | ✗ Rates bundled together |
| Debit card savings | ✓ Passed to you | ✗ Kept by processor |
| Rewards card surcharge | ✓ Only actual cost | ✗ Often hidden in tier |
| eCommerce merchants | ✓ Fair rates | ✗ Most transactions Non-Qualified |
| Statement auditable | ✓ Yes | ✗ Rarely |
| Overall cost | ✓ Lower | ✗ Higher for most merchants |
A Real-World Example
Let's say you process $50,000 per month in eCommerce transactions and your average interchange rate is 1.80%.
Interchange Plus
Tiered Pricing
Annual Savings with Interchange Plus
$4,032
On just $50,000/month in processing volume
How START Merchant Services Handles Pricing
START Merchant Services has offered interchange plus pricing exclusively for over 20 years. We believe tiered pricing is designed to obscure costs, not to serve merchants — and we've built our entire business model around the opposite philosophy. Apply for a merchant account and see the difference transparent pricing makes.
We've processed over $160 million in transactions monthly and set up more than 60,000 merchant accounts because merchants trust us to give them a fair deal — and keep giving them a fair deal year after year.
Key Takeaways
- →Interchange is the base fee set by Visa/Mastercard — the same for every processor, non-negotiable.
- →Interchange Plus passes that exact cost to you with a small, visible markup — what you see is what you pay.
- →Tiered pricing bundles interchange into opaque buckets, letting processors keep the savings on cheaper card types.
- →eCommerce merchants are especially disadvantaged by tiered pricing — most of your transactions land in the most expensive tier.
- →START uses interchange plus exclusively — no hidden fees, no tiered buckets, no surprises.