By NUMUS editorial team
A pricing model tells you how a provider assembles charges. It does not tell you the final cost without the underlying amounts, transaction classifications and other account terms.
Interchange-plus separates specified underlying costs from a provider's markup. A bundled flat rate combines transaction components within a defined category. Tiered pricing assigns transactions to priced categories according to the provider's rules. The useful question is how your actual payments move through that structure.
This guide follows one fictional sale through three invented calculations. For the broader cost inventory, including recurring and conditional items, use our processing fees guide.
Start with the difference between a component and a total
Visa distinguishes interchange reimbursement between acquiring and issuing banks from the merchant discount negotiated with the merchant's financial institution. A quoted markup above underlying costs is therefore not directly comparable with a bundled merchant price. Visa: Interchange and merchant pricing.
For each proposal, identify which numbers are components and which are totals. Ask what is already included before adding a separate amount. Conversely, do not treat an attractive component as though it were the complete transaction charge.
Interchange-plus: identify the costs being passed through
Under an interchange-plus arrangement, ask the provider to identify the underlying charges passed through and the markup added to them. Determine how network charges, fixed per-item charges and any other items appear in the agreement. The label alone does not answer every inclusion question.
Adyen's explanation of its Interchange++ model separates interchange, scheme fees and its acquiring fee. It also identifies card, geographic and transaction characteristics among variables affecting underlying fees. That is a concrete provider example, not a universal definition of every agreement carrying a “plus” label. Adyen: Interchange++ explained.
Write down the markup and the scope of the pass-through separately. If a component is an estimate, label it as such and identify what would establish the actual amount. A fixed markup does not make all underlying costs fixed.
Flat-rate: establish the category covered by the bundle
For a bundled transaction rate, ask which card and payment categories it covers and which exceptions or separate charges remain. A percentage-plus-fixed-amount formula can be straightforward without being the same formula for every channel.
Square's US guidance, for example, describes different rates for online, in-person, manually entered and card-on-file methods available through Square Invoices. Do not turn the phrase “flat rate” into an assumption that all of your payment workflows have identical pricing. Square: Fees by payment type.
When a bundle already includes an underlying component, adding that component again produces the wrong total. Have the provider confirm the inclusion list rather than reconstructing it from the name of the model.
Tiered: get the classification rules, not just the lowest rate
Stripe's educational explanation describes a model in which a processor groups transactions into categories, often called qualified, midqualified and nonqualified, each with its own rate. Those are pricing classifications; the article's example does not establish how your provider assigns your transactions. Stripe: Interchange pricing models.
Ask for the criteria, the complete schedule and the report showing where a transaction landed. Establish whether the listed amount replaces another rate or adds to it. A headline rate has limited value when you cannot tell which transactions receive it.
Also clarify what “tier” means in the specific document. A set of transaction classifications is not the same calculation as a provider discount triggered by your total monthly volume.
One fictional $80 sale, three invented calculations
The following exercise holds the sale amount at $80. Every rate, fee, cost and category assignment is invented to make the mechanics visible. These are not NUMUS prices, available offers, typical rates or a forecast. We assume no refund and exclude recurring, equipment and other conditional costs.
| Model | Assumptions for this exercise | Calculation | Transaction total |
|---|---|---|---|
| Interchange-plus example | Underlying interchange $1.10; network cost $0.12; markup 0.30% plus $0.08 | $1.10 + $0.12 + ($80 × 0.003) + $0.08 | $1.54 |
| Bundled flat-rate example | 2.20% plus $0.16; includes the transaction components shown separately above | ($80 × 0.022) + $0.16 | $1.92 |
| Tiered example | Provider assigns this sale to the invented middle category: 2.45% plus $0.14, inclusive of the example's transaction components | ($80 × 0.0245) + $0.14 | $2.10 |
The interchange-plus example contains a $0.24 percentage markup, not a $0.24 total price. Adding its $0.08 fixed markup gives $0.32, then the invented underlying costs bring the result to $1.54.
The other two rows do not add those underlying amounts separately because this exercise explicitly includes them in their bundles. The tiered row uses its assigned middle category, not the lowest category that might appear elsewhere in a fictional schedule.
For illustration, if that schedule's lower category were 1.65% plus $0.14, its $80 calculation would be $1.46. If its upper category were 3.10% plus $0.14, it would be $2.62. Those outcomes explain why the category assignment matters. They do not imply that a real transaction can be moved between categories at will.
Bring the structure you were offered and the points you cannot yet reconcile. Discuss pricing questions.
Change an assumption before declaring a winner
The first row is lowest only under the chosen inputs. In a second invented scenario, replace its $1.10 interchange amount with $2.00 and leave the other components unchanged. Its transaction total becomes $2.44: $2.00 + $0.12 + $0.24 + $0.08.
That is above the example's $1.92 flat-rate total. Nothing about the model name alone settles the comparison. These are two teaching scenarios, not predictions about any card type or provider.
A single sale also cannot represent an entire month. Account charges, the distribution of transaction categories and the services included in each offer still need attention. Use our quote comparison worksheet when comparing written proposals on the same sales mix. For charges already billed, use the merchant statement guide.
Keep a short model-confirmation record
| Model | Confirm with the provider | Save as evidence |
|---|---|---|
| Interchange-plus | Underlying items, markup, billable events and separately charged components | Complete pricing schedule and an explained sample calculation |
| Flat-rate | Covered categories, included components, exceptions and separate charges | The applicable channel or plan schedule |
| Tiered | Classification rules, all categories, and whether listed rates replace or add to other amounts | Category definitions and the report used to verify assignment |
Record unanswered questions as unresolved. Do not populate them with a competitor's terms or an internet average. That would create an apparent comparison without establishing the terms actually available to your business.
The goal is a calculation you can explain and check, followed by a discussion of account fit. Bring the written terms and your transaction profile to NUMUS to Discuss pricing questions.