Interchange Plus – Optimizes Costs
Quite simply, “interchange plus” pricing means the merchant pays the interchange rate plus a fee to their credit card processor. That fee is usually measured in basis points. Each basis point is 1/100th of a percent. Fixed credit card transaction costs.
For example, let’s say you’re a retail business working with a processor that charges 70 basis points for a fee of 0.70%. If you ran a card-present transaction of $50 with an exempt Visa check card, the interchange fee would be 0.80% + $0.15 for a combined rate of 1.5%.
That gives you an interchange rate of $0.75 + $0.15 for a grand total of $0.90 for the transaction.
That same transaction through Stripe or PayPal/Braintree would cost $1.75! A total savings of 48.6%!