What is interchange++ pricing, and is it right for you?

Every time a customer taps their card, a small fee comes out of the sale. How that fee is worked out depends on the pricing model your provider uses. The two you’ll see most often are blended pricing and interchange++, often written as IC++.

Blended pricing: simple, but not always cheap

With blended pricing you pay one flat percentage on every card payment, whatever the card type. It’s easy to understand and easy to budget for. The catch is that the rate has to cover the most expensive cards too, so on everyday debit card payments you can end up paying more than the true cost.

How interchange++ works

Interchange++ splits the fee into three parts. The interchange fee goes to the customer’s card issuer. The scheme fee goes to the card network, such as Visa or Mastercard. The third part is your provider’s own margin. Because each part is shown separately, you can see exactly what you’re paying and where the money goes.

The trade-off is that statements are harder to read, and the cost of each payment changes with the type of card used. Business and international cards usually cost more than UK debit cards.

Which one should you choose?

If most of your customers pay with UK debit cards and you take a steady volume each month, interchange++ often works out cheaper. If you’re just starting out or your takings are small, a blended rate can be simpler and the difference may be small. The best way to know is to look at your recent statements and compare the real numbers.