At Head Shop, our motto is Payment Processing with Integrity. We believe that our clients deserve a fair and transparent pricing model for interchange fees, and we have therefore adapted an Interchange Plus pricing model to meet this end. To understand Interchange Plus pricing, we must first understand the meaning of interchange fees.
Interchange Fees Defined
Interchange fees refers to costs charged by Visa and MasterCard to process their credit and debit cards. Interchange fees are charged to all merchants who accept credit cards and must be paid by the merchant services provider immediately upon accepting a credit or debit card transaction.
Interchange rates vary according to the type of debit or credit card, size and industry of a merchant, the method of processing (ie POS, eCommerce). There are literally hundreds of interchage rates which vary between about .80% and 2.4%. The following table shows interchange pricing rates for US merchants.
What is Interchange Plus Pricing?
Interchange Plus pricing works by adding a small margin on top of Visa and MasterCard’s interchange fees. Interchange Plus models typically charge a percentage fee and a per transaction fee above interchange fees. Our pricing works like this:
- Interchange + .50% and .10 per transaction (for POS transactions)
- Interchange + .70% and .10 per transaction (for eCommerce transactions)
So, if interchange is 1.6% and .10 per transaction
+ Head Shop’s rate of .50% and .10 per transaction
= you would be charged 2.1% and .20 on the transaction.
Head Shop charges the same margin over interchange for all credit card and debit card types. With this model, there are no pricing tiers or non-qualified cards which will incur higher rates, so the merchant ends up paying lower payment processing fees. We think you’ll appreciate the difference!
