Flat rate
One published percentage applies per transaction type, regardless of the underlying card. It's predictable, easy to budget for, and requires no statement decoding — you pay the same rate whether the customer used a basic debit card or a premium rewards card.
Interchange plus
You pay the actual interchange cost for each transaction, plus a disclosed markup on top. It's more transparent and usually cheaper at higher volume, but it takes more attention to read correctly on a statement.
- Cheaper when debit is a large share of your transaction mix
- Transparent — you can see exactly what the markup is
- Requires more attention to your monthly statement
- Usually paired with a traditional merchant account
The rough threshold
Below moderate monthly card volume, flat rate's simplicity generally wins out. Above that threshold, the savings from interchange plus start to outweigh the added complexity of reading a more detailed statement. Your specific card mix can move that line in either direction.
Avoid tiered pricing
Qualified, mid-qualified and non-qualified buckets make up the least transparent pricing model still in use. Transactions get quietly downgraded into more expensive tiers with little visibility into why. If you see these words on a quote, it's worth asking more questions before signing.
How to model the comparison yourself
Take a recent statement, calculate your effective rate under your current model, then ask a prospective provider to estimate your rate under the alternative model using the same volume and card mix. A real comparison uses your actual numbers, not generic averages.
Hybrid and blended models
Some providers offer a middle ground, such as a flat rate with volume-based discounts at higher tiers. These can work well for growing businesses, but they still deserve the same scrutiny as pure flat-rate or interchange-plus pricing.
What doesn't change between the two models
Equipment, support and contract terms are separate decisions from pricing structure. A provider offering free equipment and no long-term contract can pair that with either pricing model, so don't assume one automatically comes bundled with better terms elsewhere.