Interchange plus is a billing method used by T360 to give you further transparency and savings. When you process a transaction, we pass the interchange cost directly on to you. At the end of the month, we charge you a set rate on your total processed volume.
Many processors use “tiered” pricing, where you are charged a base “qualified” rate and then charged a “non-qualified” fee for most transactions. This results in rates that are much higher than needed. By passing the cost directly to you and only charging for a single mark up, interchange plus pricing gives you significant savings while creating a very transparent arrangement with your processor (you know our cost and margin!)
Interchange fees are set by Visa and MasterCard and paid to the customer’s bank (issuing bank). This is the orange in the charts. These will vary depending on the type of credit card (consumer vs. premium) and how it is entered (card-present vs. manually keyed).
PROCESSORS AND MERCHANTS OF ALL SIZES ARE BOUND BY THE SAME INTERCHANGE
As you go through the various pricing methods below, pay attention to the blue, this is the processor’s profit margin. Notice how it changes between the various pricing methods.
Interchange plus pricing is still uncommon, as it has the lowest margins for a processor. The processor passes the true Visa and MasterCard costs on to the merchant, and charges a single mark up (%) on top of the processing volume.
We offer all of our merchants Interchange plus pricing as it creates a very transparent arrangement between us and our clients.
Tiered pricing usually consists of having a lower “qualified” rate for certain transactions and higher “mid” and “non-qualified” rates for others. The common drawback is that merchants are enticed with a low “qualified” rate, but nearly all transactions end up in the higher mid and non-qualified tiers.