How do I Calculate Fees with Interchange plus Pricing?

To calculate fees using the interchange plus pricing model, you must combine three distinct components for every transaction: the base interchange rate, card network assessments, and the processor’s markup.

Follow these steps to perform the calculation:

1. Determine the Interchange Rate: This is the percentage set by card networks (like Visa or Mastercard) based on the card type and transaction method. For example, a restaurant credit card transaction often has a rate of 2.2%.
2. Add Network Assessments: These are small fixed fees charged by the card associations, typically averaging around $0.10 to $0.21 per transaction.
3. Apply the Processor Markup: This is the fixed fee added by your service provider. At The POS Brokers, this is typically a small percentage (such as 0.20%) plus a consistent per-transaction fee (such as $0.10).

Example Calculation for a $100 Restaurant Credit Transaction:

• Interchange (2.2%): $2.20
• Assessments: $0.10
• Processor Markup (0.20% + $0.10): $0.30
• Total Fee: $2.60

This model is considered highly transparent because it itemizes each cost, allowing businesses to see exactly what they are paying rather than charging a single bundled rate.