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Pricing Model Comparison

Two pricing models. One usually costs you more as you grow.

Flat-rate and interchange-plus are the two dominant ways processors price card acceptance. They're not equally transparent, and they don't scale the same way. Here's the honest comparison.

Pricing model comparison

How it works

Flat-rate pricing charges one advertised percentage on every transaction regardless of card type. It's simple to understand and easy to market, which is why app-based and small-business-focused processors (Square, Stripe, PayPal, and others) favor it. The rate is priced to cover the full range of interchange costs across all card types, which means it includes a built-in premium on your lower-cost transactions to cover the expensive ones.

Interchange-plus pricing passes through the actual card network cost for each specific transaction, plus a fixed, disclosed markup on top. It's more visible on a statement — you can literally see the interchange cost and the markup as separate lines — and for most businesses above a modest volume threshold, it's cheaper, because you're not paying a blended premium on every transaction to subsidize the expensive-card average.

When it makes sense

Flat-rate suits very low volume, occasional or seasonal card acceptance, and businesses that want zero statement complexity even at some cost premium.

When it typically costs more

Once volume is consistent and meaningful — roughly the point most small businesses reach within their first year or two — interchange-plus pricing typically wins on cost, and the 'complexity' of an itemized statement is a fair trade for what it saves.

Common questions

Which is cheaper, interchange-plus or flat-rate?
For most businesses with consistent monthly volume, interchange-plus is cheaper because you're paying actual cost plus a fixed markup rather than a blended rate that subsidizes higher-cost cards. Very low-volume or highly seasonal businesses sometimes come out even or ahead on flat-rate.
Why do so many processors use flat-rate if it's often more expensive?
Flat-rate is easier to market (one number) and easier to build into an app-based signup flow with no underwriting conversation. It's a good fit for their business model — that's a separate question from whether it's the cheapest option for any given merchant.
How do I know which is cheaper for my specific business?
Use our free calculator — enter your volume and current fees, and it estimates interchange-plus cost for comparison, anonymously and with no statement required.

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This page describes publicly known pricing structures and models for general informational and comparison purposes. It does not state any competitor's current specific pricing, which varies and changes over time. Confirm current pricing directly with any provider before making a decision.