Credit card processing fees continue to climb, with U.S. businesses now paying record-high swipe fees that trail only labor as one of the biggest operating expenses. When margins are tight, the pricing structure behind your merchant account can make or break profitability.
For merchants in high-risk industries, or those processing significant volume, choosing between interchange plus and tiered pricing isn’t just a technical detail. It determines how much transparency you have into costs, how easily you can forecast expenses, and how well you can scale.
At Corepay, we work with merchants across industries to ensure their pricing model supports growth, not hidden fees. Let’s break down the differences between interchange plus and tiered pricing in 2025, along with the pros and cons of each model.
What Is Interchange Plus Pricing?
Interchange plus pricing separates out the three major components of card processing:
- Interchange fees: Set by the card networks (Visa, Mastercard, American Express, Discover). These vary by card type, transaction method, and merchant category.
- Assessment fees: Also charged by the card networks, typically more stable and consistent.
- Processor markup: A set fee from your payment processor, usually expressed as a percentage and a per-transaction amount.
The “plus” in interchange plus refers to your processor’s markup being added on top of the raw interchange and assessment fees. For example, if a Visa consumer credit card transaction carries an interchange of 1.65% + $0.05, your processor might add 0.30% + $0.10. That full breakdown is passed through to you.
This level of visibility is why interchange plus is considered the most transparent model in the industry. Merchants know exactly what portion of their fees goes to the card networks and what goes to their processor.
How Tiered Pricing Works in 2025
Tiered pricing takes a different approach. Instead of showing interchange and processor markups separately, transactions are bundled into categories. Most processors use three tiers, but the rules for each tier are set by the processor, not the card networks.
- Qualified transactions – The lowest-cost tier. These are usually standard consumer credit or debit cards, swiped or dipped in person, and settled promptly.
- Mid-qualified transactions – Cards or transaction types that carry slightly higher risk, such as keyed-in sales, online payments, or rewards cards.
- Non-qualified transactions – The most expensive tier. These often include corporate cards, international cards, premium rewards cards, or transactions that don’t meet settlement requirements.
On the surface, tiered pricing looks simple. A processor might advertise “as low as 1.59%.” But the reality is that only a small percentage of your transactions qualify for that lowest rate. Most fall into mid- or non-qualified categories, where fees climb significantly.
This is why tiered pricing often frustrates merchants over time. It hides the real interchange cost and gives processors control over how transactions are classified. The lack of transparency makes it difficult for businesses to forecast expenses or audit their statements.
Key Differences Between Interchange Plus and Tiered Pricing
Here’s how the two models stack up:
| Fee Transparency | High. Every fee (interchange, assessment, markup) is itemized. | Low. Fees are grouped into tiers with no visibility into network rates. |
| Control Over Costs | Strong. Merchants can track costs by card type and transaction method. | Limited. Processors decide which tier a transaction falls into. |
| Predictability | Consistent structure, even as interchange rates fluctuate. | Unpredictable. Mix of qualified vs non-qualified transactions shifts monthly. |
| Best for High-Volume or High-Risk | Yes – full visibility helps manage costs and chargebacks. | No – hidden markups erode margins over time. |
| Setup Simplicity | Moderate – more details to review, but worth it. | High – simple for small or new merchants. |
Pros and Cons of Tiered Pricing
Pros
- Simple to understand – Three tiers (qualified, mid-qualified, non-qualified) make onboarding fast.
- Attractive for new businesses – Flat marketing rates (“as low as 1.59%”) can look appealing when starting out.
Cons
- Hidden costs – Most transactions fall outside the cheapest tier, driving up the effective rate.
- Lack of transparency – Merchants can’t see interchange costs or how processors assign categories.
- Unpredictable fees – Your effective rate can change month to month depending on card mix.
- Not designed for high-risk or high-volume merchants – Over time, the costs compound and margins shrink.
Which Businesses Benefit Most From Interchange Plus Pricing?
While every merchant should understand both models, interchange plus tends to deliver the biggest value for businesses that need transparency, scale, and predictability. In 2025, these groups benefit the most:
- High-Risk Merchants – Verticals such as telemedicine, CBD, adult, firearms, and nutraceuticals often face higher interchange costs due to increased chargeback and fraud exposure. Interchange plus helps them see exactly where fees come from, making it easier to manage disputes and stay compliant.
- High-Volume eCommerce and Retailers – Large transaction counts amplify the impact of hidden markups. Interchange plus ensures that volume drives efficiency, not inflated fees.
- Subscription and Recurring Billing Models – For SaaS, subscription boxes, and membership-based businesses, interchange plus makes recurring transactions more predictable, lowering long-term overpayment.
- Data-Driven Companies – Businesses that rely on analytics to fine-tune margins prefer interchange plus. The fee transparency integrates easily into dashboards, accounting software, and financial models.
The bottom line is simple: if your business is growing, regulated, or transaction-heavy, interchange plus offers the visibility you need to keep fees under control.
When Tiered Pricing Might Still Make Sense
Despite its flaws, tiered pricing can still work in certain scenarios. For very small or low-volume merchants, the simplicity may outweigh the hidden costs in the short term.
- Micro-merchants and startups – A local coffee shop or boutique running a few dozen card transactions a week may prefer the simplicity of flat marketing rates when first starting out.
- Businesses focused only on ease – Owners who don’t want to dig into fee statements or compare card types may accept the trade-off of higher long-term costs.
However, the “easy” setup of tiered pricing often fades quickly. As volume grows, more transactions get pushed into mid-qualified and non-qualified tiers, causing effective rates to climb far higher than expected. That’s when many merchants migrate to interchange plus for cost control and transparency.
At Corepay, we see this transition often. Merchants that start on tiered pricing eventually move to interchange plus once they realize the hidden costs. The difference is especially stark in high-risk verticals, where tiered models are often structured to protect the processor, not the merchant.
Corepay Advantage: Corepay offers interchange-plus pricing even to merchants in high-risk industries that other processors push into tiered structures. This allows businesses to benefit from transparency, manage chargebacks effectively, and avoid inflated “non-qualified” markups.
How Corepay Approaches Merchant Pricing in 2025
At Corepay, we believe pricing should empower growth, not create confusion. That’s why we work with merchants to identify the best model for their size, industry, and risk profile.
For many businesses – especially those in high-risk or high-volume categories – interchange plus pricing is the most effective way to keep fees transparent and controllable. By passing through interchange and assessments directly, and keeping markups predictable, merchants know exactly what they’re paying and why.
Corepay’s value goes beyond pricing structure. With our proprietary Netvalve gateway, CB-Alert chargeback mitigation suite, and multi-bank acquiring relationships in the U.S., UK, and EU, we ensure merchants have the tools they need to scale securely. Unlike traditional processors that default high-risk merchants into tiered pricing, Corepay provides interchange plus options that deliver real transparency.
Conclusion – Choosing the Right Model for Long-Term Growth
Interchange plus and tiered pricing may both have their place, but in 2025 the differences are clearer than ever. Interchange plus gives businesses transparency, control, and scalability. Tiered pricing, while simple, often hides true costs and grows more expensive over time.
For merchants looking to cut hidden fees, manage chargebacks, and protect margins, interchange plus pricing is the smarter choice. And with Corepay, even high-risk industries can access transparent pricing models designed to support compliance and long-term growth.
