What is interchange-plus pricing?

At a glance

How it works

Think of a wholesale price and a shop's markup. The wholesale part is passed through to you without change. The markup is the one part you can compare and negotiate. Statements are longer, because each layer has its own line.

1. The customer pays with a card.
2. The issuing bank's interchange is passed through at cost.
3. The card network's fees are passed through at cost.
4. Your processor adds its markup, for example 0.40% plus 8 cents per sale.
5. Your statement lists each layer.

A Canadian example

A café in Calgary takes a $40 sale on a Visa Classic card, tapped in store. Visa's published card-present interchange for that card is 1.25%, or $0.50. Say the processor's markup is 0.40% plus 8 cents. That is $0.16 plus $0.08, or $0.24. The total is $0.74, plus network fees. An example only, not a quote. The markup comes from one provider's first published tier. Your own terms may differ.

What is different in Canada and Québec

• The Code of Conduct says your monthly statement must show the rate and amount charged for interchange, wholesale discount rates and network assessment fees. Interchange-plus is the model where those lines are easiest to find.
• Canadian small-business interchange is lower since 19 October 2024. On this model the cut shows on the interchange line. On a flat rate you cannot see it.
• Interac says its debit interchange is currently set at zero. A per-transaction processing fee set by contract takes its place, so debit has its own line.
• Québec merchants cannot add a card surcharge for consumers. A clear markup helps you set prices that cover your costs.
• You can ask for your agreement in French and compare it line by line with the English summary box.

What it costs and where it shows on your statement

You pay interchange and network fees at cost, plus the markup. You may also pay monthly, compliance and gateway fees. On the statement, look for separate lines for interchange, network or assessment fees and the processor's fees. If you see one blended percentage, you are likely on a flat or tiered plan.

Where CleverPays fits in this step

Your pricing model sits in the agreement between you and your processor. Interchange and network fees come from the card networks. CleverPays does not set interchange or network fees. CleverPays is operated by Groupe Heo Inc., an Agent of Fiserv Canada Ltd.

We can read a recent statement with you and show the effective rate and each fee line. We will walk you through which model you are on and what each line means. We answer in English and French.

Common mistakes

• Treating interchange-plus as always cheaper. Low volume or high per-sale fees can change that.
• Looking at the markup alone and ignoring monthly and compliance fees.
• Forgetting that network fees are charged on top of interchange.

Related terms

• Interchange fee: the bank-to-bank fee that is passed through at cost.
• Flat-rate pricing: one blended rate for most card sales.
• Tiered pricing: sales sorted into tiers, each with its own rate.
• Basis points: one hundredth of a percentage point, often used for markups.
• Effective rate: total fees divided by card sales.
• Payment processor: the company that sets the markup.

Common questions