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Interchange-plus vs flat-rate vs tiered pricing

By Chris Ste-Marie, Founder of AllProPay · Updated October 24, 2026

Processors price card payments three common ways. One shows you the true cost. The other two blend it together so you can’t see it.

See which one you’re on

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First, the one cost nobody controls: interchange

Every card transaction has a base cost set by the card brands, called interchange. It changes by card type: a rewards card costs more than a basic debit card. No processor can lower it. Pricing models only differ in how the markup on top is shown to you.

Interchange-plus: you see both numbers

Interchange-plus passes interchange straight through to you, with a clear, fixed markup on top. You see the card-brand cost and the processor markup as two separate numbers.

  • Why it’s transparent. You can verify it. The markup is the same on every transaction, so there are no surprises.
  • Who it fits. Most established businesses, especially as volume grows.

Flat-rate: one simple number that can cost more

Flat-rate charges the same percentage on every card, even cheap debit cards that cost the processor very little. Simple and predictable: that’s its appeal.

  • The trade-off. You pay the same high rate on low-cost cards, so flat-rate often costs more as your volume grows.
  • Who it fits. Very small or new businesses that value simplicity over the last dollar of savings.

Where flat-rate quietly hurts merchants: Interac debit

This matters most in Canada.

  • Flat-rate charges the same high rate on an Interac debit tap as on a premium rewards credit card, even though Interac costs far less than credit.
  • Your low-cost Interac transactions get billed at the credit rate, and the gap stays out of sight on your statement.
  • Most businesses take a lot of debit. That’s where the quiet overpayment lives.

Interchange-plus keeps Interac separate and low: the Interac cost on its own line, with a clear, fixed markup. How Interac and the card brands price differently: Interac and card fees in Canada.

Tiered: the one to watch

Tiered pricing sorts your transactions into buckets, usually called qualified, mid-qualified, and non-qualified. The rate you were quoted is the qualified bucket. Many transactions quietly land in the pricier buckets, so you pay more than the rate you were sold.

  • Why it’s a problem. You can’t predict or verify what you’ll pay, because the processor decides which bucket each transaction falls into.
  • What to do. Qualified and non-qualified language on your statement means tiered pricing. Find your effective rate to see what you really pay.
The ad vs your statement A mock advertisement reading rates as low as 1.59 percent, with an asterisk, sits beside a statement excerpt. An arrow from the ad rate points to only the qualified line of the statement. The statement shows 2 sales in the qualified bucket at 1.59 percent, 6 sales in mid-qualified with a 1.49 percent surcharge added on top for 3.08 percent, and 6 sales in non-qualified with a 1.99 percent surcharge added on top for 3.58 percent. 12 of these 14 sales missed the ad rate. Not a real advertisement. Example rates, illustration, not a quote. THE AD VS YOUR STATEMENT Tiered pricing, where the headline rate is not what you actually pay. ONLY THIS LINE ADVERTISEMENT Rates as low as 1.59% * the qualified rate Sign up today THE FINE PRINT *Qualified transactions only. Other sales carry a surcharge on top. The processor decides which transactions qualify. YOUR STATEMENT Fees and charges BUCKET WHERE YOUR SALES LANDED RATE YOU PAY Qualified the advertised rate 1.59% 1.59% Mid-qualified surcharge added on top +1.49% surcharge 3.08% Non-qualified bigger surcharge on top +1.99% surcharge 3.58% What you actually pay higher than the rate you were sold 12 of these 14 sales missed the ad rate The advertised rate is the cheapest bucket, but most transactions land in the more expensive ones. LEGEND A card sale A sale with a surcharge on top Not a real advertisement. Sale counts are schematic. Example rates, illustration, not a quote.

So which is cheapest?

There’s no single answer. Anyone who gives you one without seeing your numbers is guessing. It depends on your monthly volume, average sale size, and card mix. Work out your effective rate from your statement, then compare.

Our pricing starts with interchange-plus, with Interac priced as Interac. Where it’s allowed (never in Quebec, never on Interac), cash discounting or dual pricing is an option too.

Our free statement review does the math for you. Send one recent statement and we’ll tell you which model you’re on, what you actually pay, and whether a cleaner setup would help. If it wouldn’t, we’ll say so.

Same card, three prices Grouped bars for three card types, a debit tap, a rewards card and a keyed-in card, each priced three ways. Inside every bar the grey card cost is the same height for that card, because the card's real cost does not change with how you are priced. Interchange-plus, marked as what AllProPay does, adds the same thin fixed markup on every card and is the shortest bar on every card. Flat rate is one height on debit and rewards and taller on the keyed-in card. Tiered uses example rates: debit lands in qualified at 1.59 percent, rewards in mid-qualified at 1.59 plus 1.49 percent, keyed-in in non-qualified at 1.59 plus 1.99 percent. Every flat-rate and tiered markup sits above the interchange-plus total and is flagged red as you overpay. Which is cheaper depends on your volume and card mix. Heights are schematic, an illustration, not a quote. SAME CARD, THREE PRICES Grey is the card's real cost, the same under every model. Only what sits on top changes. Debit tap costs very little to accept YOU OVERPAY ALLPROPAY YOU OVERPAY QUALIFIED 1.59% FLAT INTERCHANGE PLUS TIERED Rewards card costs more than debit YOU OVERPAY ALLPROPAY YOU OVERPAY MID-QUALIFIED 1.59% + 1.49% FLAT INTERCHANGE PLUS TIERED Keyed-in card card number typed in YOU OVERPAY HIGHER RATE WHEN KEYED ALLPROPAY YOU OVERPAY NON-QUALIFIED 1.59% + 1.99% FLAT INTERCHANGE PLUS TIERED FLAT RATE One rate, more when keyed Same percentage on debit and rewards, so cheap debit cards overpay. Keyed-in sales get a higher rate on top. INTERCHANGE-PLUS Follows the real cost The card cost passes straight through, plus the same fixed markup on top. TIERED Surcharges stack on top The ad rate covers qualified sales only. Other buckets add a surcharge on top. Which is cheaper depends on your volume and card mix. LEGEND Card cost, same everywhere Fixed markup you can see ALLPROPAY Flat markup, overpaid Tiered markup, overpaid Schematic, example tier rates. Illustration, not a quote.

Common questions

What is interchange-plus pricing?
It passes the card-brand cost (interchange) straight to you and adds a clear, fixed markup on top. You see both numbers, so nothing is hidden.
Is flat-rate or interchange-plus cheaper?
It depends on your volume and card mix. Flat-rate charges the same price for every card, even cheap debit cards, so it can cost more as you grow. The only way to know is to compare your own numbers.
What is tiered pricing?
It sorts transactions into qualified, mid, and non-qualified buckets. The advertised rate is the cheapest bucket, but most transactions land in the more expensive ones, so the real cost is higher than it looks.

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