Interchange ++ Pricing Model

It is a pricing model that breaks down all the costs of credit card processing into three parts; interchange fee, a card scheme/card associations fee and processing fee.

It is a pricing model where the merchant is charged a three-part fee for card transactions:

• The interchange fee is charged by the issuing (consumers) bank to the acquiring (merchants) bank and varies depending on the type of transaction e,g. card present transaction and the type of card used e.g. corporate card, consumer card etc.
• The card associations fee is charged by the card providers (Visa, Mastercard) to the acquiring bank for using their systems.
• The processing fee is charged to the merchant by their payment service provider as a mark-up for their services e.g the use of their gateway.

The advantage of this type of billing is its transparency in the fees charged by the payment service provider.