Card processing fees
Interchange-Plus vs Tiered vs Flat-Rate Pricing: Which Is Which?
The three common card processing pricing models, how to recognise each on your statement, and how to compare offers fairly.
The one thing all three share
Underneath every pricing model the same costs exist: interchange (paid to the bank that issued the card, published by the networks: Visa, Mastercard) and network fees. The models differ only in how the processor packages those costs plus its own markup.
Flat-rate pricing
On your statement: one percentage, often with a per-transaction amount, applied to every sale, whatever card was used.
- Good: simple and predictable. Common with all-in-one payment apps.
- Watch for: on cards with low interchange (many debit cards), you still pay the full flat rate, so the hidden markup on those sales is larger.
Free statement analysis
Send one recent card processing statement. CELER Merchants will work out your effective rate, explain every fee line, and tell you honestly whether you are already on a good deal.
Tiered pricing
On your statement: rates labelled qualified, mid-qualified and non-qualified (names vary).
- Good: the headline "qualified" rate looks low.
- Watch for: the processor decides which tier each sale lands in. Rewards cards, business cards and keyed-in sales often fall into higher tiers. You cannot see what interchange actually cost, so you cannot see the markup.
Interchange-plus pricing
On your statement: interchange shown by card type, then a fixed markup (a percentage, a per-transaction fee, or both).
- Good: the markup is visible, so two offers can be compared line for line.
- Watch for: the statement is longer. Also check for monthly and annual fees on top of the markup.
How to compare two offers fairly
- Take one recent month of your real statement.
- Ask each provider to price that same month: same volume, same transaction count, same card mix.
- Compare total fees, including monthly, annual, PCI and equipment costs.
- Read the contract length and early termination fee before you sign.
Worked example (made-up round numbers): if two offers on the same $40,000 month come to $1,180 and $1,320 in total fees, the first is $140 cheaper for that month, whatever the headline rates say.
Go deeper
Already past the basics? CELER Merchants' flat rate vs interchange-plus guide shows how to model both on your own statement and why the per-item fee decides small tickets.
Frequently asked questions
Is interchange-plus always cheaper?
Not always. It is easier to check. The total depends on the markup and any extra monthly or yearly fees.
Can my processor change my rates?
Many merchant agreements allow changes with notice. Check your agreement and read any notices that come with your statement.
What is a surcharge program and is it allowed?
Surcharging credit cards is subject to card network rules and some state laws, and surcharging debit cards is not allowed under network rules. Check current rules before adding a surcharge.
CELER Merchants. General information, not financial or legal advice. Fee names and terms differ between processors; always check your own merchant agreement.