What is Markup Pricing?

The markup over interchange and assessments is the only area where you can negotiate credit card processing costs. Keep in mind that many factors contribute to the markup, so not everything will be negotiable, or it will only be negotiable to a point.

Furthermore, the markup isn’t all profit. It’s split among all the organizations that facilitate the processing of your business’s transactions such as the acquiring bank, processor, ISO(s), gateway or software provider and others. The markup must cover cost as well as profit for all of these entities.

Markups differ significantly from one processor to the next. These inconsistencies are why it’s difficult to accurately compare credit card processing on the open market.


  • Fees set by your payment processor, plus any other add-on equipment or software providers such as a payment gateway provider
  • Are negotiable – We have negotiated the LOWEST RATES for YOU! If you own a low risk business, please click here to review our lowest rates.

Various pricing models currently being used by credit card processors:

  • Interchange-Plus
  • Subscription
  • Tiered
  • Flat-Rate

4 Types of Markup Pricing Models

1. Tiered pricing – This pricing model charges you based on three main tiers — qualified, mid-qualified, and non-qualified.

Transactions that fall under the qualified category have lower fees, while your processor will charge higher rates for non-qualified transactions. Debit cards and non-reward credit card transactions typically fall under the qualified rate, while transactions involving corporate cards and higher rewards cards would be under the non-qualified category.

2. Flat-Rate pricing – With flat-rate pricing, the processor charges a flat rate for all transactions. So, whether a customer pays using a credit card, a debit card, or a rewards card, the rate will be the same.

3. Interchange-plus pricing – With interchange-plus pricing, your processor breaks down your rate into two components:

The interchange, which is set by credit card networks.
The “plus”, which is essentially the markup of your processor.
So, when a credit card processor uses an interchange-plus pricing model, it means that they’re charging a markup on top of the card issuer’s fees.

These rates are typically expressed as the interchange fee plus the markup — e.g., 2.1% + $0.10 per transaction.

4. Subscription pricing – Arguably the most favorable model out the above, processors that use membership-based pricing do not take a cut out of your sales. Instead, you only pay the interchange rates set by the card networks (Visa, Mastercard, Amex, etc.)


Flat Rate



Wholesale & markup fees are separate

Wholesale & markup fees are blended

Wholesale & markup fees are separate

Wholesale & markup fees are blended

Markup is a % and per-transaction fee

All transactions cost the same, regardless of type and processor

Markup is a per-transaction fee plus a flat-rate monthly service fee

Rates vary according to whether the transaction meets certain qualifications

Best for: All businesses


Stay away!


Stay away!


Stay away!

Sample Quoted Payment Processing Rates

Pricing Model

Sample Quote

Wholesale Fees

Interchange-Plus0.25% + $0.10Not included in the quote
Subscription$0.10 (+ $99/mo membership)Not included in the quote

Qualified: 1.79% + $0.10

(Mid-Qualified: 2.19% + $0.15)

(Non-Qualified: 2.99% + $0.20)

Included in the quote

2.90% + $0.30 online

2.75% in-person

Included in the quote

Need help figuring out your rates?

If you’re having trouble identifying the information we’ve outlined above, feel free to send us your merchant statement and our payment consultants will analyze it for you.

Get in touch with the Swipe Card 247 team — we’re happy to assist you.

Share on facebook
Share on twitter
Share on linkedin

Related Posts

Pin Debit vs Signature Debit

When you swipe your debit card at the checkout, the point-of-sale (POS) terminal will usually ask you: “Debit or Credit?” I have no idea why this has become accepted, as

Read More »

Swiped vs. Keyed Transactions

What is Interchange? In simple terms, interchange is the cost of completing a given card transaction. Interchange fees cover the cost of maintaining card networks, servers, and security infrastructure. Additionally,

Read More »

Leave a Comment

Your email address will not be published. Required fields are marked *