Payment Pricing, Explained

Flat rate vs. interchange-plus: the math they're hoping you don't do

Providers like Stripe and Square charge one flat rate, typically 2.9% + 30¢, on every transaction regardless of card type. It's simple. That simplicity is exactly how they profit. Here's what's actually inside that number, and how to know which model your business should be on.

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The two models

First, what you're actually choosing between

Flat-rate pricing

One rate on everything, typically 2.9% + 30¢. Whatever card your customer taps, you pay the same. Predictable and easy to understand, because the provider absorbs the variation in card costs and keeps the difference.

Interchange-plus pricing

You pay the actual cost of each card (the "interchange," set by the card networks) plus a fixed, transparent markup agreed upfront. Your statement gets more detailed, and your effective rate usually gets meaningfully lower.

Your situation

Which camp are you in?

The right answer depends on where you're starting from. Pick your current setup and we'll break down what it means for you.

The math

The same four cards, priced two ways

The actual cost of processing varies dramatically by card type. A standard Visa debit card costs roughly 0.80% at interchange. A Visa Infinite card costs about 1.42%. On flat rate, you pay 2.9% on both. That gap is the provider's margin.

The flat-rate spread on a typical Canadian card mix

~68% of Canadian transactions are premium cards (Visa Infinite, World Elite)

Flat-rate pricing
Standard Visa debit2.90%
Visa Infinite2.90%
World Elite Mastercard2.90%
Corporate card2.90%

Same rate on everything. Simple, and expensive.

Interchange-plus pricing
Standard Visa debit~0.80% + markup
Visa Infinite~1.42% + markup
World Elite Mastercard~1.50% + markup
Corporate card~1.70% + markup

You pay actual interchange + a transparent, fixed markup agreed upfront. Typically a fraction of what the flat-rate spread costs you.

On a Visa Infinite transaction, the flat-rate provider pockets over 1%. That's pure margin on your highest-volume card type.

When does switching make sense?

There's a critical mass, generally around $30K/month in processing, where interchange-plus savings outweigh the fixed costs of a dedicated merchant account. Below that, flat-rate can be more cost-efficient. It varies by industry and card mix. That's what our audit determines: whether switching saves you money for your specific situation, not in theory.

Why us

We set up both camps. That's why you can trust the math.

This comparison isn't a pitch for one side: we build flat-rate and interchange-plus setups every week, across 10+ processors. Whichever camp wins for your numbers, we can set it up — which is exactly why we have no reason to bend the math. Sometimes the answer is "switch." Sometimes it's "stay, and here's why."

The only way to know which camp wins for your numbers is to run them. That's what the free audit does: line by line, on your actual statements, in 48 hours.

Run the numbers on your actual statements

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48 hr turnaround
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