Blended vs Interchange Plus Plus Card Pricing: Which Costs Less

LAST REVIEWED 2026-09-06

Blended pricing

Blended pricing is a single rate applied to all card transactions, regardless of card type. The acquirer calculates an average cost across its portfolio, including interchange, scheme fees, and its own margin, then presents one percentage rate. This simplicity appeals to small businesses that prefer predictable costs without analysing complex statements.

However, blended rates often include a buffer to protect the acquirer against higher-cost credit cards. As a result, debit card transactions may be overcharged, while credit card transactions may be undercharged relative to the actual interchange. The lack of transparency makes it difficult to verify whether the rate is fair.

Under the Interchange Fee Regulation (IFR), consumer debit interchange is capped at 0.2% and credit at 0.3%. These caps apply to regulated cards, but commercial cards are not capped. Blended rates must cover the mix of all card types, so a merchant with mostly debit sales may subsidise those with more credit sales.

For a merchant processing £10,000 in a month, a blended rate of 1.5% would cost £150. But if the actual interchange on debit is 0.2% and on credit is 0.3%, the true cost might be lower, depending on the mix. The difference is the acquirer's margin and any buffer.

Interchange plus plus

Interchange plus plus (IC++) pricing breaks down costs into three components: interchange, scheme fees, and the acquirer's margin. Each is shown separately on the statement, providing full transparency. The merchant pays the exact interchange cost set by the card schemes, plus the scheme fees (such as Visa or Mastercard network fees), plus a fixed or percentage margin agreed with the acquirer.

This model is often favoured by larger businesses and those with high transaction volumes, because it allows them to see exactly where their money goes and negotiate the margin component. It also ensures that the merchant benefits from lower interchange rates on debit cards, as the cost is passed through directly.

However, IC++ requires more administrative effort to reconcile statements and understand the various fee lines. It may also involve a monthly minimum fee or a higher fixed charge to compensate the acquirer for the transparency.

For a £10,000 month, if interchange is 0.2% on debit and 0.3% on credit, scheme fees are 0.1% and margin is 0.5%, the total cost would be the sum of these components applied to the respective card volumes. The exact figure depends on the mix.

Interchange plus

Interchange plus is a hybrid model that shows interchange as a separate line but bundles scheme fees and the acquirer's margin into a single 'plus' percentage. It offers more transparency than blended but less than IC++. The merchant sees the interchange cost, but the other fees are not itemised.

This model can be easier to understand than IC++ while still allowing the merchant to see the interchange component. However, the 'plus' rate may include a buffer for scheme fees, which can vary by card type and transaction type.

For example, a merchant might be quoted 'interchange plus 0.5%'. The interchange for a debit card might be 0.2%, so the total would be 0.7%. For a credit card, interchange might be 0.3%, making the total 0.8%. The merchant can see the interchange but not the breakdown of scheme fees and margin.

Interchange plus is less common than blended or IC++ but may be offered by some acquirers as a middle ground. It is important to ask for a full breakdown of the 'plus' component to compare accurately.

Worked example: debit-heavy retailer

Consider a retailer processing £10,000 in card payments per month, with 80% debit cards and 20% credit cards. Under the IFR, consumer debit interchange is capped at 0.2% and credit at 0.3%. Assume scheme fees are 0.1% for both, and the acquirer's margin is 0.5% under IC++.

For IC++: Debit volume = £8,000. Interchange = 0.2% of £8,000 = £16. Scheme fees = 0.1% of £8,000 = £8. Margin = 0.5% of £8,000 = £40. Credit volume = £2,000. Interchange = 0.3% of £2,000 = £6. Scheme fees = 0.1% of £2,000 = £2. Margin = 0.5% of £2,000 = £10. Total IC++ cost = £16+£8+£40+£6+£2+£10 = £82.

For blended pricing, the acquirer might quote a single rate of 1.2% to cover the mix. On £10,000, that would be £120. The difference is £38, meaning the retailer pays more under blended.

This example illustrates that debit-heavy merchants often benefit from IC++ because the actual interchange is lower than the blended rate's implicit assumption.

Worked example: credit-heavy restaurant

Now consider a restaurant processing £10,000 per month, with 70% credit cards and 30% debit cards. Using the same assumptions: credit interchange 0.3%, debit 0.2%, scheme fees 0.1%, margin 0.5%.

IC++: Credit volume = £7,000. Interchange = 0.3% of £7,000 = £21. Scheme fees = 0.1% of £7,000 = £7. Margin = 0.5% of £7,000 = £35. Debit volume = £3,000. Interchange = 0.2% of £3,000 = £6. Scheme fees = 0.1% of £3,000 = £3. Margin = 0.5% of £3,000 = £15. Total IC++ cost = £21+£7+£35+£6+£3+£15 = £87.

For blended, a rate of 1.5% might be quoted, costing £150 on £10,000. The difference is £63, again favouring IC++.

However, if the blended rate is set competitively, say 1.0%, the cost would be £100, which is still higher than IC++ but closer. The key is that blended rates often include a buffer for risk, so credit-heavy merchants may still pay more than the actual cost.

In practice, the margin under IC++ might be higher for credit-heavy portfolios to compensate for risk, but the transparency allows negotiation.

Who can get IC++

IC++ pricing is available to businesses of all sizes, but acquirers may have minimum volume thresholds or charge higher fixed fees for smaller merchants. The UK Payments Systems Regulator (PSR) has been pushing for greater transparency in card acquiring, and as of July 2023, acquirers must provide summary boxes and online quotation tools to help merchants compare.

Small businesses can request IC++ quotes, but they may find that blended pricing is simpler and initially appears cheaper due to lower fixed fees. However, over time, IC++ can be more cost-effective, especially for debit-heavy sales.

Some acquirers may only offer IC++ to businesses with a certain turnover or transaction count, but this is not universal. It is worth asking for an IC++ quote regardless of size.

The PSR's market review into card acquiring services has highlighted concerns about lack of transparency and high costs for small merchants. As a result, more acquirers are offering IC++ as an option.

Reading a statement under each model

Under blended pricing, a statement typically shows a single line item for each card type or a single overall rate. For example, 'Visa debit: 1.2%' or 'All cards: 1.5%'. There is no breakdown of interchange, scheme fees, or margin.

Under interchange plus, the statement shows interchange as a separate line, but the 'plus' is combined. For example, 'Interchange: 0.2%' and 'Plus: 0.5%' for a total of 0.7%.

Under IC++, the statement shows three lines: 'Interchange: 0.2%', 'Scheme fee: 0.1%', and 'Acquirer margin: 0.5%'. This allows the merchant to see exactly what each component costs.

When comparing statements, look for the total cost in pounds and pence. A statement with more lines may seem complex, but it provides the data needed to verify that the rates are fair and to negotiate better terms.

Always check for additional fees such as monthly minimums, statement fees, or PCI compliance charges, which may not be included in the per-transaction rate.

Frequently asked questions

Is IC++ cheaper?

IC++ can be cheaper than blended pricing, especially for merchants with a high proportion of debit card transactions, because the interchange cost is passed through at the actual capped rate (0.2% for consumer debit). Blended rates often include a buffer that overcharges debit transactions. However, the total cost depends on the acquirer's margin and any fixed fees. For credit-heavy merchants, IC++ may still be cheaper if the margin is competitive. It is essential to compare quotes based on your specific card mix and transaction volumes.

Can a small business get IC++?

Yes, small businesses can request IC++ pricing, but availability may vary by acquirer. Some acquirers may require a minimum transaction volume or charge higher fixed fees to make it viable. The UK Payments Systems Regulator has encouraged transparency, and as of July 2023, acquirers must provide summary boxes and online quotation tools, making it easier for small businesses to compare. It is advisable to ask for an IC++ quote and compare it with blended options, considering both per-transaction costs and any monthly fees.

What is interchange plus?

Interchange plus is a pricing model where the interchange fee is shown separately, but scheme fees and the acquirer's margin are combined into a single 'plus' percentage. For example, a quote might be 'interchange plus 0.5%'. This provides more transparency than blended pricing but less than interchange plus plus (IC++), which itemises all three components. Merchants can see the interchange cost but not the breakdown of other fees. It is a middle-ground option that may be easier to understand than IC++ while still offering some insight into costs.

Why do blended rates differ by card type?

Blended rates differ by card type because the underlying interchange fees vary. Consumer debit cards have a capped interchange of 0.2%, while consumer credit cards have a cap of 0.3%. Commercial cards are not capped and can have higher interchange. Acquirers set blended rates based on the expected mix of card types in a merchant's portfolio. If a merchant processes more credit cards, the blended rate will be higher to cover the increased interchange costs. Conversely, a debit-heavy merchant might receive a lower blended rate, but it may still be higher than the actual interchange due to the acquirer's margin and buffer.

How do I compare quotes across models?

To compare quotes across blended, interchange plus, and IC++, request a sample statement based on your actual transaction data. Ask for the total cost in pounds for a typical month, including all fees. For blended, you get a single rate. For interchange plus, you get interchange plus a 'plus' percentage. For IC++, you get three components. Use your card mix to calculate the total cost under each model. Also, consider any fixed monthly fees, minimum fees, and contract terms. The PSR's online quotation tools, available since July 2023, can help you compare offers.