Pricing models
Merchant Pricing Models: Flat Rate, Interchange-Plus, Tiered, and Subscription
Merchant pricing models change how costs appear on statements. The right comparison depends on volume, average ticket, card mix, risk, software, and support needs.
Pricing model comparison
| Model | How It Works | Watch For |
| Flat rate | One simple percentage or blended rate for many transactions. | Convenience can hide card-cost differences. |
| Interchange-plus | Interchange and assessments plus provider markup. | More transparent, but statements are more complex. |
| Tiered | Transactions grouped into qualified, mid-qualified, and non-qualified categories. | Downgrades can make costs hard to predict. |
| Subscription | Monthly membership plus lower per-transaction markup. | Best only if volume supports the fixed cost. |
| Surcharge or cash discount | Customer-facing pricing approach tied to card-use cost. | Rules, signage, state laws, and customer experience matter. |
How to compare pricing
| Question | Why It Matters |
| What is monthly volume? | Fixed fees and subscription models depend on volume. |
| What is average ticket? | Per-transaction fees matter more on small tickets. |
| What card types are common? | Rewards, debit, corporate, keyed, and ecommerce transactions differ. |
| What software is required? | POS, gateway, ecommerce, and integrations may drive total cost. |
Frequently asked questions
Which pricing model is best?
There is no universal best model. The right choice depends on transaction mix, volume, ticket size, support, and software needs.
What is interchange-plus?
Interchange-plus separates underlying card costs from provider markup.
Why is tiered pricing confusing?
Transactions can be grouped into pricing buckets that do not clearly show underlying cost drivers.