Flat rate or interchange++: which payment gateway pricing model is cheaper for your sales

When a business evaluates the costs of integrating a payment gateway, the commercial proposal usually falls into one of two pricing structures: flat-rate pricing (also known as a blended model) or the *interchange++* model (IC++). Both cover the exact same technical and financial costs, but they allocate margin and volatility in very different ways.

To identify which model is more advantageous, it helps to break down the processing fee and examine how each structure reacts to the cardholder's origin and card profile during checkout.

The anatomy of a payment transaction fee

Every time a customer clicks pay and an order is authorized, the gross amount is subject to three separate deductions before reaching the merchant's account:

• Interchange fee: the fee paid to the card-issuing bank. In the European Union, Regulation (EU) 2015/751 caps these fees for consumer cards issued within the European Economic Area (EEA) at 0.20% for debit cards and 0.30% for credit cards. However, commercial cards and cards issued outside the EEA are exempt from these caps, and their rates are typically much higher.
• Scheme fee (the first «+»): the fee collected by the card networks (Visa, Mastercard, etc.) for routing and clearing transactions across their rails. This typically represents a very small percentage (commonly between 0.02% and 0.15% depending on traffic classification) plus a fixed fraction of a few cents.
• Acquirer markup (the second «+»): the commercial margin retained by the acquiring bank or processor for assuming credit risk, providing processing technology, and managing settlements.

Understanding these three components explains why transaction costs vary significantly behind the scenes.

Flat-rate pricing: simplicity backed by a risk margin

A flat-rate model charges a single fixed percentage and, typically, a fixed transaction fee regardless of the card presented. For instance, a standardized commercial rate combining a set percentage plus a few fixed euro cents on all domestic transactions.

The main benefit for the merchant is accounting predictability: forecasting monthly costs is straightforward. However, to guarantee this certainty, payment providers incorporate a safety buffer into the blended rate to absorb expensive transactions (such as international or commercial cards). When an EEA consumer pays with a standard domestic debit card capped at 0.20% interchange, the merchant still pays the full flat fee, leaving a generous margin for the intermediary.

In early-stage businesses or with modest sales volumes, flat pricing is often the standard because it minimizes operational friction during setup and eliminates the need to audit itemized settlement statements.

Interchange++: cost transparency and variable pricing

Under an interchange++ arrangement, the payment processor passes through the exact interchange cost and actual card scheme fee directly to the merchant, adding only an agreed-upon fixed acquirer markup. These terms are standard across enterprise-level pricing structures designed for mid-market and high-volume operations.

If a consumer pays with an EU-issued debit card, the interchange applied is 0.20%, plus scheme fees and the agreed gateway markup. If the customer uses a corporate card or a credit card issued in the United States, the interchange fee can easily exceed 1.50% or 2.00%, and that specific expense is absorbed directly by the merchant for that transaction.

Under this framework, settlement reports accurately show what cards your buyers are using and how much revenue goes to each entity across the payment processing chain.

Which model is cheaper based on your card distribution

Choosing the most cost-effective structure requires analyzing your customer base and sales distribution:

• B2C merchants with local and EEA buyers: if you sell primarily to consumers residing in Spain or across the European Union, the vast majority of payments are processed on cards protected by European regulations (capped at 0.20% for debit and 0.30% for credit). In this scenario, interchange++ is almost always cheaper than a blended rate, as your business captures the full regulatory savings rather than surrendering them to the processor.
• B2B merchants with recurring billing or SaaS models: businesses usually pay using commercial or corporate cards. Because commercial cards are exempt from EEA interchange caps, their underlying interchange fees are substantially higher. If your revenue comes primarily from corporate cards, a blended rate that does not discriminate between consumer and corporate cards might be cheaper, though many providers add surcharges when corporate card volume exceeds a specific threshold.
• Travel businesses and cross-border ecommerce: if a substantial share of your sales originates from cardholders outside the EEA (such as the UK, the US, Latin America, or Asia), interchange and scheme fees escalate rapidly. On interchange++, international transactions will increase your monthly invoice; on a flat rate, the impact depends on whether your contract applies non-EEA surcharges or maintains an all-inclusive rate.

Average order value (AOV) also influences total processing costs: on low-ticket transactions, fixed cent-based fees represent a much higher percentage of the purchase than the variable interchange percentage itself.

Practical conclusion

There is no single pricing model that suits every company across payment fees. As a general benchmark, if your sales are concentrated among European consumers and you process enough volume to justify reconciling detailed settlement files, interchange++ reduces net acquiring costs noticeably. Conversely, if you cater to corporate clients via company cards, process heavy cross-border volume, or require administrative simplicity, a flat rate provides stability that offsets the premium paid on domestic debit volume.