If you're paying a bundled rate vs. cost-plus for payment processing, you're likely paying more than you should be to accept payments.
In its general sense, cost-plus pricing refers to how a company profits from items or services it sells, through a transparent markup of the base cost. In the payment card industry, it is also known as "Interchange-Plus Pricing" because the interchange fee is the base, with the “plus” portion referring to the markup rate applied by the payment processor as payment for servicing the transaction. This “plus” rate is usually a percentage. The benefit of cost-plus pricing is the consistency and transparency of the markup rate, which is often less than tiered-pricing models that are oddly bundled.
Payway uses cost-plus pricing so you never pay more than you should. We charge the actual interchange rate based on card type plus 10 cents per transaction.* With cost-plus pricing, you’ll always know exactly how much of a cut your processor is taking from a transaction, even if you don’t know the interchange rate in advance.
On the other hand, if your processor is charging you bundled or flat-rate pricing, you're likely paying more than you should be to accept payments. Bundled rate pricing combines the interchange and the processor’s markup into a single charge. This pricing is not transparent and you'll have no idea how much of your processing fee is going to the issuing bank and how much to your processor.
Payment providers such as Square and PayPal, use bundled-rate pricing. This kind of pricing plan will charge the same rate for both debit and credit cards. Under bundled-rate pricing, you’ll be paying far more to process debit card transactions than you would under a cost-plus pricing plan.
How much can you save with cost-plus? See for yourself.
*This pricing is subject to change based on card type, business type, volume, and credit authorization.