Flat rate or interchange-plus: which pricing model fits your volume

There are two ways a processor can charge you for card payments. Both are legitimate. The mistake is staying on the one that fit your business three years ago.

Flat rate

One rate on everything, typically 2.9% + 30¢. Whatever card your customer taps, you pay the same. The provider absorbs the variation in card costs and keeps the difference. A standard debit transaction costs roughly 0.80% at interchange; you pay 2.9% on it anyway. On a Visa Infinite card, which costs about 1.42%, the provider keeps over a full percentage point. That is pure margin on your highest-volume card type.

The upside is real: no monthly minimums, no statement fees, no contract, and a bill you can predict. For a new or low-volume business, or one whose card mix is mostly low-cost debit, flat rate can genuinely be the cheaper option.

Interchange-plus

You pay the actual interchange on each card, plus a fixed markup agreed upfront. Your statement gets longer because you are seeing the real numbers instead of a blended one, and your effective rate usually drops. The trade is a dedicated merchant account, which carries fixed monthly costs and a contract worth reading before you sign.

The number that decides it

There is a tipping point, generally around $30K a month in processing, where interchange-plus savings outweigh the fixed costs of a merchant account. Below it, flat rate is often right. Above it, the flat-rate spread keeps growing with your volume, because flat rate does not scale down as you scale up. The exact point shifts with your industry and card mix, which is why it is worth running on your own statements rather than a rule of thumb.

Already on interchange-plus? Check the markup

Being on the right model does not mean you are paying a fair rate. Interchange is the same for everyone; the markup is not, and it drifts. Some processors also sell tiered pricing dressed as interchange-plus, and the fees around the rate (minimums, PCI non-compliance charges, terminal leases) add up on either model.

Why we can say this straight

We set up both models every week, across 10+ processors. Whichever wins for your numbers, we can build it, so there is no reason to bend the math. Sometimes the audit ends with “switch”. Sometimes it ends with “stay, and here is why”.

The full side-by-side, with the same four cards priced both ways, is on Flat rate vs interchange-plus. The free audit runs the numbers on your actual statements in 48 hours.