Pricing Models: Flat-Rate vs Interchange-Plus vs Tiered vs Subscription
Which pricing model is structurally cheapest for your volume, with a vendor map per model.
Flat-rate wins below $300K/yr because the subscription fees of IC+ and subscription models do not amortise. Interchange-plus (Helcim) wins in the $300K-$800K band. Subscription (Stax) wins above $800K/yr because the $99-$199/mo amortises across enough transactions that the 0% markup over interchange pulls ahead. Tiered pricing is structurally worse and exists because the margin lives in the bucket assignment, not the rate itself.
The four models, side by side
| Feature | Flat-rate | IC+ | Subscription | Tiered |
|---|---|---|---|---|
| Transparent fee components | ✗ | ✓ | ✓ | ✗ |
| Predictable monthly bill | ✓ | ◐ | ✓ | ✗ |
| Margin shrinks with volume | ✗ | ✓ | ✓ | ✗ |
| Cheapest above $1M/yr | ✗ | ✓ | ✓ | ✗ |
| Cheapest below $250K/yr | ✓ | ✗ | ✗ | ◐ |
| No-monthly-fee option | ✓ | ✓ | ✗ | ✓ |
Flat-rate
One headline rate per transaction. Simple, predictable, ceiling-priced.
Interchange-plus
Wholesale interchange exposed, plus the processor's markup.
Subscription
Monthly fee, no markup over interchange, cents per transaction.
Tiered
Qualified / mid / non-qualified tiers. Margin lives in the bucket assignment.
Why tiered pricing usually loses
- Tiered processors classify every transaction into qualified, mid-qualified, and non-qualified buckets, each at a different rate. The margin lives in the bucket assignment, which the merchant cannot audit.
- Rewards cards, corporate cards, international cards, and any AVS-mismatched transactions tend to land in the non-qualified bucket at 3.5%+.
- A flat-rate vendor at 2.9% beats most tiered structures once you account for the realistic mix of card types.