Interchange plus, interchange++ or blended: how to tell which one your contract uses

Short answer

There is a mechanical test for which pricing model your contract uses, and it comes from a regulator rather than from a provider. For any given transaction, ask two questions. Does interchange pass through at cost? Do scheme fees pass through at cost as well?

Interchange only: interchange plus. Both: interchange++. Neither: blended. A periodic fee that does not move with your volume at all: fixed pricing, a fourth model the usual three-way comparison leaves out.

Most finance teams cannot answer those two questions about their own contract. That is the problem worth solving, because the answer decides what you are able to verify for the rest of the relationship.

The test is published, and it is shorter than you expect

The UK Payment Systems Regulator ran a market review into card-acquiring services and published a glossary with its final report in November 2021. That glossary defines four pricing options. Each definition turns on one thing: what passes through at cost, per transaction.

Interchange fee plus pricing, in the regulator's words, is pricing "whereby for any given transaction, the acquirer automatically passes through at cost the interchange fee applicable to that transaction."

Interchange fee plus plus pricing is the same sentence with three words added: the provider "automatically passes through at cost the interchange fee and scheme fees applicable to that transaction."

That is the entire difference between the two models everybody writes about. One line item.

Question one: does interchange pass through at cost?

Interchange is the fee that goes to the card issuer. It is set by published schedules and, in several markets, capped by regulation. Neither you nor your provider sets it. We have mapped where each fee layer is published in our guide to the four layers of a payment processing fee.

So there is a clean tell. Under interchange plus and interchange++, the interchange on a transaction should match the schedule for that card, that channel, that market. Different cards produce different numbers on the same day, because interchange itself differs by card.

Under blended pricing it does not. You get one rate, and a corporate credit card costs you the same as a regulated debit card even though they cost your provider very different amounts.

Look at a single day of transactions and sort by card type. If the rate you were charged moves with the card, interchange is passing through. If it holds flat across every card type, it is not.

Question two: do scheme fees pass through at cost?

This is the question that separates the two models, and it is the one nobody asks.

Scheme fees are what your provider pays the card network. The regulator defines them as fees paid to the operator of a card payment system, covering both scheme services and processing services. They are not interchange. They are a second cost, set unilaterally by the networks.

Under interchange++, they appear as their own pass-through line. Under interchange plus, they do not. They sit inside your provider's own number instead.

The regulator's definition of what is left over is worth reading closely. It calls that remainder acquirer net revenue: the costs your provider incurs "other than interchange fees and scheme fees" to provide the service, plus its margin. So the merchant service charge has exactly three parts. Interchange, scheme fees, and everything your provider keeps or spends on itself.

Under interchange++, all three are visible. Under interchange plus, two of them are fused into one, and you cannot tell a scheme fee increase from a margin increase.

That distinction has a practical edge. When your costs rise under interchange++, you can see which layer moved. Under interchange plus, you cannot, and your provider has no obligation to tell you.

Blended pricing is not a model. It is what is left over.

Here is the part that should change how you read your own contract.

The regulator does not define blended pricing by what it does. It calls the option standard pricing, and it defines it by exclusion: pricing where the provider "does not automatically pass through at cost the interchange fee applicable to that transaction" and which "does not satisfy the criteria for IC+ pricing, IC++ pricing or fixed pricing."

Read that again. The most widely used pricing option in card acquiring is officially the residual category. It is the box a contract lands in when it qualifies for none of the others.

That is not a rhetorical point. It is the reason blended pricing resists verification. There is no defined mechanic to check the number against. Under interchange++ you can reconstruct three components from three sources. Under blended pricing there is one number, and the only thing you can compare it to is the same number last month.

A blended rate is a volume-weighted average, so it moves when your card mix moves, with nothing in your contract changing at all. We have made the longer version of that argument in your effective rate is not evidence.

The fourth model, for completeness

Fixed pricing is any option where you pay a fixed periodic fee that does not depend on the volume or value of transactions you accept, within stated limits.

If your card costs arrive as a flat monthly figure that holds steady while your volume climbs, you are not on any of the three models above. You are on the fourth. It is rare at scale, and it makes per-transaction economics impossible to derive from the invoice alone, because the invoice has no per-transaction component to derive them from.

What each model actually lets you verify

The model you are on sets a ceiling on the work your finance team can do. Not a preference, a ceiling.

Two of those rows are verifiable positions. Two are not.

This is the point at which the pricing model stops being a procurement detail and becomes a control question. A contract you cannot check on a per-transaction basis is not a control. It is a rate you were quoted.

What to do once you know

If you are on interchange++. You have the strongest position available, and most teams do not use it. Reconstruct the expected interchange and scheme fee for a sample of transactions from the published schedules, then compare against what was billed on those exact transactions. Discrepancies here are provable, because both sides of the comparison have a source.

If you are on interchange plus. Verify the interchange line, which you can. Then ask your provider, in writing, for the scheme fee component to be itemised separately. That is a request to move to interchange++ in substance, and it is a reasonable one, since your provider already receives those fees itemised from the networks.

If you are on blended. Recognise what you can and cannot claim. You can check the arithmetic on the invoice. You cannot verify the price. Any cost programme that starts by benchmarking your blended rate against a peer's blended rate is comparing two unverified numbers. The higher-value move is to get the underlying components itemised first, and only then talk about the rate.

If you cannot tell which one you are on. That is itself the finding, and it is more common than the market admits. You can settle it with one month of settlement data and one month of invoices: sort by card type, then run question one. It takes an afternoon, and it tells you what your contract is regardless of what the sales conversation called it. Our line-by-line walkthrough of a provider invoice covers what each charge on the page should contain.

The bottom line

The three pricing models are not three shades of the same thing. They are three different levels of evidence you are permitted to see.

Interchange++ gives you three sourced components. Interchange plus gives you one, and fuses the other two. Blended gives you a number and a request that you trust it.

Bluefyn reconstructs contract pricing and checks fees transaction by transaction, so expected against actual becomes provable rather than asserted. Bluefyn never moves, holds or custodies funds. It analyses transaction and provider data.

The first step is not a tool. It is knowing which of the four models you are on, because that is what decides whether verification is available to you at all.

Frequently asked questions

What is the difference between interchange plus and interchange++?

One line item. Under both models your provider passes interchange through at cost. Under interchange++ it also passes scheme fees through at cost, as their own separate line. Under interchange plus the scheme fees stay inside your provider's own number, fused with its margin.

How do I tell which pricing model my contract uses?

Sort one month of transactions by card type and look at the rate you were charged. If the rate moves with the card, interchange is passing through at cost, so you are on interchange plus or interchange++. Then look for a separate scheme fee line. If it is there, you are on interchange++. If the rate holds flat across every card type, you are on blended.

Why can I not verify a blended rate?

Because there is nothing external to check it against. Interchange follows published schedules. Scheme fees follow the networks' published rates. A blended rate follows neither, since it is a single figure your provider set. The only comparison available is the same figure in a previous period, which tells you whether it changed, not whether it is correct.

Is blended pricing an officially recognised pricing model?

It is recognised, and it is defined by exclusion. The UK Payment Systems Regulator calls it standard pricing and defines it as pricing that does not pass interchange through at cost and does not meet the criteria for interchange plus, interchange++ or fixed pricing.

Does interchange plus mean I am getting a better price?

It means you can see more of what you are paying. Transparency about a component is not the same as a low price on it. Interchange plus tells you the interchange was passed through at cost; it says nothing about the size of the markup added on top.