Flat rate vs interchange plus: two ways to price a sale
The flat rate vs interchange plus question comes down to how a processor decides what to charge you for the same card swipe. Both models pass along the same underlying cost — the card networks’ interchange fees — but they package it very differently. Flat rate hides interchange inside one simple number. Interchange-plus shows it to you and adds a stated markup on top. Neither is a trick; they suit different businesses. The job of this guide is to show you the math on both, with worked examples, so you can tell which one fits yours. This is general industry information, not a Moneybox quote — your actual rate depends on your account.
Flat rate
One posted percentage plus a few cents per sale — simple, but it hides interchange inside the number.
Interchange-plus
Interchange is passed through at cost with a stated markup on top, so you can see what the processor keeps.
Your own number
The only way to settle it is your real statement; send it to our team and we will run both models in dollars.
How flat-rate pricing works
Flat rate is the model behind most instant-approval apps. You pay one posted percentage plus a small fixed amount per transaction, no matter what card the customer uses. As of October 2026, Square’s published rates are 2.6% + $0.10 for a tapped or swiped card in person and 2.9% + $0.30 for an online payment; other flat-rate apps are in the same neighborhood. You can confirm the current figures on Square’s pricing page.
The appeal is obvious: one number, no surprises, nothing to read. The catch is that a flat rate has to be high enough to cover the processor’s cost on expensive cards — rewards cards, corporate cards — which means on cheaper cards you are overpaying, and the processor keeps the difference.
How interchange-plus works
Interchange-plus unbundles that single number. You pay the actual interchange the card networks charge for each specific card, plus the networks’ assessments, plus a stated markup from your processor — a set percentage and a set number of cents per transaction. Because interchange is passed straight through at cost, you are no longer overpaying on cheap cards to subsidize the expensive ones, and the processor’s markup is the same line every month regardless of card mix. The trade-off is that your statement has more lines on it, which is why a lot of sellers never looked closely. Our guide to reading your merchant statement walks through exactly those lines.
Worked example: $10,000 a month, in person
Say you run $10,000 a month across 100 sales that average $100 each, all card-present. The numbers below are illustrative, using published flat rates and a blended interchange figure for a typical card mix; your real figures will differ.
| Cost component | Flat rate (2.6% + $0.10) | Interchange-plus |
|---|---|---|
| Percentage charge | 2.6% of $10,000 = $260 | Blended interchange ~1.8% = $180 |
| Assessments | (included) | ~0.14% = ~$14 |
| Per-transaction fixed | 100 × $0.10 = $10 | (in interchange above) |
| Processor markup | (included in the 2.6%) | [your rate % + ¢] |
| Monthly total | ~$270 | ~$194 + your markup |
The gap between $270 and the interchange-plus subtotal of about $194 is the room a markup fills. Whether interchange-plus comes out ahead at this volume depends entirely on how large that markup is — which is the honest reason we show it as a blank you fill in from a real statement rather than a number we promise here.
Worked example: $40,000 a month
Scale the same mix up to $40,000 a month across 400 sales. Flat rate grows in a straight line: 2.6% + $0.10 lands around $1,080 a month. The interchange-plus subtotal scales the same way to roughly $776 before markup. The dollar gap between the two models is now about four times larger than it was at $10,000 — which is the key point. Flat rate’s overcharge is a percentage, so it compounds with volume. The more you process, the more a transparent markup tends to matter.
Where the break-even really is
There is no single magic number, but the commonly cited range where interchange-plus starts to beat flat rate for most businesses is [~$5k–$15k/mo — cite source] in monthly card volume. Below that, the simplicity of flat rate often wins and the dollar difference is small. Above it, the math usually tips toward interchange-plus, and the gap widens as you grow. Where your own break-even falls depends on your average ticket, your card mix, and how card-present versus online your sales are — a business with lots of small tickets pays more in fixed per-transaction cents, which shifts the line.
- Higher monthly volume favors interchange-plus — the overcharge compounds
- Larger average tickets favor interchange-plus — fewer fixed per-transaction fees
- Very low volume or tiny tickets can still favor flat rate’s simplicity
- Your card mix (rewards vs. plain debit) changes the real interchange you pay
How to find your own number
The only way to settle flat rate vs interchange plus for your business is to run your actual statement through both models. Pull last month’s processing statement, find your total volume and transaction count, and compare the posted flat rate against interchange-plus with a real markup. If reading the statement is the hard part, start with how to read your merchant statement. When you want the comparison done for you in dollars, our pricing page shows a worked sample statement, and a statement review will tell you your current cost, your interchange-plus cost, and the difference — or tell you honestly if switching would not help.