Accepting card payments is essential for growing your business, but the fees involved can often feel complicated and unclear. By understanding where these costs come from and how they’re calculated, you’ll gain more control over your payment setup and make smarter decisions for your company’s future. In this article, we’ll walk you through the key fees involved in interchange++ (IC++), explain how they work and show you why IC++ is a transparent pricing model.
It’s also important to note that the fees discussed in this blog may not be the only fees included when accepting card payments. The exact mix can differ from one provider to another. We’ll point out what to watch for, so you can make clear comparisons and see the real cost of processing payments, as well as where you could save.
What are the pricing model fees?
Processing card transactions involves a complex network of financial institutions, which means that payment data often needs to pass between several parties to ensure that transactions can be performed.
Under any pricing model, the total cost is built from three key fees:
- Interchange fee, also known as the issuing bank fee, is what the consumer’s bank charges for each transaction. This is typically the biggest proportion of the total pricing model fees.
- Card scheme fee, which is typically Visa or Mastercard’s charge on each transaction. Such fees are mainly defined based on a merchant’s monthly sales volume being processed and the industry they operate in.
- Processing service fee, also known as the acquiring fee, is the cost that can be shared between the payment service provider (PSP), the acquirer and the sales partner (if applicable) for providing their services.
Want to learn more about the different players involved in the transaction flow? Watch our video below.
These three fees are deducted as a percentage of every transaction, but who sets them and how they’re reviewed depends on the pricing model. The exact percentage for each transaction will vary depending on factors such as your business type, the card used by your customer and whether the payment is domestic or international.
That’s why, at emerchantpay, we favour IC++. For businesses, it separates each cost component, so they can see exactly what they’re paying and to who. For sales partners, also known as Independent Sales Organisations (ISOs) or resellers, it helps streamline pricing, creating a transparent approach that builds trust with the businesses they work with.
What is interchange++ (IC++)?
IC++ is a transparent pricing model that separates the three fees we covered earlier.
Businesses will only agree to the processing service fee with the PSP, acquirer and sales partner (if applicable) before they start accepting card payments. The interchange and card scheme fees are separately set and charged by the issuers and card schemes.
Because of this, only the processing service fee is included in the Merchant Service Agreement (MSA), the contractual document that binds the business with the PSP, acquirer and a sales partner (if applicable). Although the interchange and card scheme fees are not included in the MSA, they are still charged to the merchant.
For sales partners, IC++ provides a clear way to present pricing. Because interchange and scheme fees are kept outside of the contract, there is no need to renegotiate terms whenever those rates change. This stability helps maintain trust and long-term relationships with the merchants you support.
At emerchantpay, we offer both a standard and an enhanced IC++ pricing model, giving businesses clarity and partners flexibility in how fees are managed.
Standard IC++
With the standard IC++ pricing model, the PSP or sales partner applies a single processing service fee across all transaction types. In practice, this means their collective percentage share of the cost stays the same for every transaction, while the interchange and scheme fees continue to vary depending on factors like location, card type and business risk level.
Enhanced IC++
Our enhanced IC++ pricing model gives the PSP or sales partner the flexibility to apply different processing service fees. These can be tailored to the cardholder’s location, the card scheme in use and the card type; whether debit, credit, consumer or corporate. The Interchange and scheme fees continue to vary, influenced by the same factors, such as location, card type and the business’s risk level.
What are the benefits of IC++?
Benefits for businesses
IC++ is the most transparent pricing model, helping businesses clearly see all the fees linked to each transaction. This transparency helps you understand exactly which costs are fixed and which may vary over time. It also brings stability as the processing service fee agreed upon within the MSA stays fixed, even when the interchange or scheme fees fluctuate.
With the interchange and card scheme fees sitting outside the control of the PSP, acquirer or sales partner, IC++ makes that distinction clear from the outset, so you always know exactly who and where your costs are coming from.
Benefits for sales partners
For sales partners, IC++ simplifies pricing by keeping interchange and scheme fees outside of the contract. This means agreements don’t have to be revisited every time non contractual rates change. The processing service fee remains consistent, which brings predictability to operations and makes it simpler to explain costs clearly to merchants.
By separating the interchange and scheme fees from your own, IC++ creates a more stable and transparent framework. This not only reduces administrative effort but also strengthens confidence in the long-term relationships that sales partners build with businesses.
Other pricing models
While we favour IC++ for its clarity and fairness, it’s also worth knowing about blended pricing, the additional pricing model other PSPs may offer.
Blended pricing combines the interchange fee, card scheme fee and processing service fee into one fixed rate for every transaction type. At first, this approach can seem simpler, especially for smaller businesses that value predictability, since changes in price only apply when the PSP, acquirer or sales partner provides written notice.
The simplicity does come with challenges, though. Because all fees are bundled together, any changes in interchange or scheme rates can leave PSPs, acquirers or sales partners exposed to unexpected costs. In many cases, these costs are passed back to businesses as higher prices, which can lead to regular contract renegotiations. This cycle can be disruptive for both sides and makes it harder to build lasting reliability.
How are the interchange and card scheme fees determined?
These two fees are set by and paid to the card issuer and the card scheme whenever a transaction is completed. Their purpose is to cover the costs associated with customer support, system maintenance and fraud mitigation, to name a few reasons.
These fees can vary per transaction based on a few factors such as the type of business, the type of card used by the customer (e.g., credit or debit card, etc.), where the transaction takes place (online, in-store, over the phone, etc.) and whether a foreign currency conversion is involved, as FX fees may apply when the transaction is processed in a different currency than the merchant’s account.
Let’s take a look at some of the factors in more depth:
Region classification
Depending on where the two parties involved in the transaction are located, the interchange and card scheme fees will vary. For example, if you're a business based in Germany, accepting domestic transactions will incur lower interchange and card scheme fees than international card payments, which likewise differ per territory. This means that the interchange and card scheme fees structure will depend on whether the transaction is domestic, intra-regional, inter-regional or International. Here’s a rundown of the different regional transactions:
- Domestic transactions are transactions where the business and the cardholder’s issuing bank are both in the same country. Domestic transactions in many regions are capped, so predicting the potential costs month by month can become easier.
- Intra-regional transactions are transactions where the business and the cardholder’s issuing bank are in different EU or EEA countries.
- Inter-regional transactions are transactions where the card is issued outside of the EEA and the business is located within Europe or vice versa.
- International transactions are transactions where the business is located in the EEA and the issuer is located outside of Europe or vice versa.
Transaction type
Card not present transactions have higher scheme fees attached, as they are often considered to bear a higher fraud risk. This is because the cardholder is not physically present during the transaction.
In other words, card payments placed in-store via a POS terminal will normally have a lower cost than online or over the phone transactions.
Payments taken over the phone (MOTO) are classed neither as face-to-face nor as having gone through the 3DS2 authentication protocol. Due to this, additional interchange and card scheme fees for these transactions should be expected.
Card type and business classification
The type of card used during the transaction also impacts the interchange and card scheme fees. Traditionally, credit cards have higher fees than, for example, debit cards and prepaid cards.
There's also a discrepancy between the fees charged for corporate versus consumer cards, with the latter being less expensive. This increase in cost is partly because any corporate or company issued cards are tied to business entities and their associated risks, meaning spending patterns, volumes and the likelihood of chargeback related activities differ from consumer cards.
When it comes to business classification, card schemes use merchant category codes (MCCs) to classify merchants and businesses by the type of goods or services provided. Those with higher risk MCCs may see higher scheme fees due to their risk level.
How emerchantpay can help
It’s central for merchants to understand how the pricing model fees are set and by whom, as well as why their impact on card payment processing.
As an experienced payment service provider and global acquirer, emerchantpay empowers you with strategic 1:1 support and dedicates time to support you on critical aspects of your payment setup, such as the fees we’ve explored in this article. Our goal is to give you the clarity and guidance you need to make confident decisions and build a payment strategy that will help your business thrive.
If you’d like to see how IC++ could help you build a clearer and more cost-efficient payment setup, our team is here to support you every step of the way.