Define cost+/interchange plus processing fee?

Define cost+/interchange plus processing fee?

• A. The fees charged by the card network and issuer are passed through directly to the merchant (interchange) and the processor adds a markup fee.
• B. All transactions have the same processing fee.
• C. The merchant pays a fixed monthly fee regardless of transactions.
• D. Processing fee is determined only by merchant size.

Answer: (A)

Cost+/interchange-plus is a pricing model where you pay the actual interchange fees set by card networks and issuers, passed through to you, and the processor adds its own markup on top. The interchange portion varies based on card type, network, and transaction details, so the base cost isn’t the same for every card. The processor’s markup is a separate charge, usually a small percentage plus a fixed per-transaction fee. So the total you pay equals the interchange amount plus the processor’s markup. For example, a $100 transaction might have $1.80 in interchange, and the processor could add 0.50% plus $0.10 per transaction, bringing the total to about $1.80 + $0.60 + $0.10 = $2.50. This variability is why the model isn’t a single flat fee, and why it’s different from fixed monthly fees or fees that depend only on merchant size.

Cost+/interchange-plus is a pricing model where you pay the actual interchange fees set by card networks and issuers, passed through to you, and the processor adds its own markup on top. The interchange portion varies based on card type, network, and transaction details, so the base cost isn’t the same for every card. The processor’s markup is a separate charge, usually a small percentage plus a fixed per-transaction fee. So the total you pay equals the interchange amount plus the processor’s markup.

For example, a $100 transaction might have $1.80 in interchange, and the processor could add 0.50% plus $0.10 per transaction, bringing the total to about $1.80 + $0.60 + $0.10 = $2.50. This variability is why the model isn’t a single flat fee, and why it’s different from fixed monthly fees or fees that depend only on merchant size.