Card Processing Pricing Models Compared
Side-by-side comparison of the common ways processors charge merchants.
Processors package the same underlying costs in different ways. The table below compares the major pricing structures by how they work, who they suit and what to watch for. It compares models, not specific providers, because markups and promotions change and differ by sales rep.
To compare real quotes, convert each to an effective rate using your own monthly sales and transaction count with the fee calculator.
Select a column header to sort.
| Pricing model | How it works | Good for | Watch out for |
|---|---|---|---|
| Interchange-plus (cost-plus) | You pay the actual interchange and network assessments plus a fixed markup, such as a percentage and a per-transaction fee. | Established businesses with steady volume that want transparency. | Markup plus monthly fees and PCI charges can still add up; statements are longer and harder to read. |
| Flat-rate | One percentage plus a fixed per-transaction fee for most card types, usually with no long contract. | New or low-volume businesses that value simplicity and fast setup. | Effective rate can exceed other models as volume grows; some card types or keyed transactions cost more. |
| Tiered | Transactions are sorted into qualified, mid-qualified and non-qualified buckets, each with its own rate. | Rarely the best fit; sometimes offered to small merchants. | The processor decides which transactions fall in each tier, so costs are hard to predict and verify. |
| Subscription or membership | A monthly fee covers a low per-transaction markup over interchange. | Businesses with higher volume or many transactions. | The monthly fee hurts at low volume; check what the membership includes and the cancellation terms. |
| Surcharging | The merchant adds a fee, within network and state limits, to credit card transactions to offset costs. | Merchants in states that allow it with customers who accept added fees. | Banned or capped in some states, never allowed on debit, must be disclosed, and can reduce sales. |
| Cash discount or dual pricing | Posted prices assume cash, and a card price is shown or a discount is given for cash. | Merchants who want to display both prices and can follow disclosure rules. | Specific signage and receipt rules apply; confusing presentations can trigger complaints or program violations. |
| Payment facilitator (aggregator) | Many sub-merchants share one master account, and the facilitator sets uniform pricing. | Startups, sellers online and in person that want fast onboarding. | Funds can be held or accounts frozen with little notice; limited rate negotiation. |
| Traditional merchant account | You have your own merchant ID underwritten by an acquiring bank through an ISO or processor. | Higher volume, high ticket or higher risk businesses. | Longer approval, possible reserves, and contracts with termination fees or equipment leases. |
Rates and programs change. Card-network interchange schedules are updated periodically, and the Visa and Mastercard rules about surcharging and discounts are subject to ongoing litigation and settlements, so verify the current rules with your provider and with the networks' published merchant guidance. For consumer protection and business-opportunity scam information, see the Federal Trade Commission. For regulation of debit interchange, see the Federal Reserve Board.