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Acquiring 8 min read

IC++ Pricing Explained: What Merchants Are Actually Paying

Most merchants on blended pricing have no idea what their card processing actually costs — they see one rate and assume it's fair. IC++ (interchange-plus-plus) changes that entirely. Understanding how it works gives you the information to negotiate, switch, and save.

David Sampson · Founder, IceTree

Payment consultant specialising in PSP matching, card acquiring, and high-risk merchant solutions ·

What IC++ Actually Is

Interchange-plus pricing (IC++) is a card processing fee structure that separates the total cost into three transparent components: the interchange fee set by the card network, the card scheme assessment fee, and the acquirer's markup. Every card transaction involves these three separate cost layers. With blended pricing, your acquirer bundles them into a single flat rate — convenient, but opaque. With IC++, each layer appears separately on your statement.

The three components are: interchange, scheme fees, and the acquirer markup. That's where the name comes from — interchange, plus scheme fees, plus the acquirer's margin.

The Three Components in Detail

1. Interchange

Interchange is the fee paid to the card-issuing bank for every transaction. It's set by Visa and Mastercard — not by your acquirer — and varies significantly by card type, transaction type, and geography.

Common UK interchange rates:

  • Consumer debit card (domestic): ~0.20%
  • Consumer credit card (domestic): ~0.30–0.40%
  • Business credit card: ~1.20–1.80%
  • Premium/rewards card: ~0.80–1.50%
  • Non-EEA card (e.g. US Visa): ~1.50–2.00%+

Interchange is the single largest component of your processing cost, and it's entirely non-negotiable. No acquirer can change what Visa or Mastercard charges.

2. Scheme Fees

Scheme fees are charged by Visa and Mastercard for network access and processing infrastructure. They sit above interchange and cover things like the assessment fee, the fixed authorisation fee, and various surcharges for specific transaction types.

These are also non-negotiable, typically adding 0.05–0.15% to your total cost depending on transaction mix. On blended pricing, scheme fees are absorbed into the flat rate invisibly. On IC++, you see them explicitly.

3. Acquirer Markup

The acquirer markup is your acquirer's margin — the only component that is negotiable. It's usually expressed as a percentage of the transaction value, sometimes combined with a fixed per-transaction fee (e.g. 0.25% + £0.02).

This is where the real pricing conversation happens. A well-negotiated markup for a merchant processing £500k/month might be 0.10–0.20%. An unnegotiated markup for the same merchant might be 0.50%+ — a difference of thousands of pounds per year.

The key insight

On blended pricing, your acquirer profits more when your customers use premium cards, because the interchange cost rises but your rate stays flat. On IC++, interchange costs pass through to you directly — which sounds worse but is usually better, because debit card transactions become significantly cheaper and your overall average cost falls.

IC++ vs Blended Rates: A Real Example

Suppose a merchant processes £100,000 per month, with the following card mix:

  • 60% consumer debit (interchange ~0.20%)
  • 30% consumer credit (interchange ~0.35%)
  • 10% business/premium cards (interchange ~1.50%)

Weighted average interchange: approximately 0.40%. Add scheme fees of ~0.10% and an acquirer markup of 0.20%, and total IC++ cost is approximately 0.70%.

A blended rate for this merchant might be quoted at 1.20–1.40% — capturing the acquirer an extra £500–700 per month on the same transaction volume. Over a year, that's £6,000–8,400 for doing nothing more than presenting a single opaque rate.

How to Read an IC++ Statement

IC++ statements are more detailed than blended statements, which can initially feel overwhelming. Look for these line items:

  • Interchange cost. Often broken down by card type. This should match published Visa/Mastercard interchange schedules — you can verify these online.
  • Scheme fees. Listed separately, sometimes under "assessment fees" or "network fees." Should total 0.05–0.15% of volume.
  • Acquirer markup. Your negotiated rate, listed clearly. This is what you agreed in your contract.
  • Per-transaction fees. Fixed fees per authorisation or settlement, usually £0.01–0.05. These matter more at high transaction counts with low average order values.

Who IC++ Is Right For

IC++ is almost always better for merchants processing above £10,000 per month, and definitively better above £50,000 per month. The transparency alone makes it worthwhile — you can benchmark your costs against published interchange rates and hold your acquirer accountable.

It's particularly valuable if:

  • Your customer base is predominantly domestic debit card users (lower interchange = lower cost)
  • You have a mixed card base and want to understand your true cost per card type
  • You're approaching £100k+ monthly volume and want to start negotiating seriously
  • You suspect your current blended rate is inflated

For very small merchants with simple, low-volume processing, blended pricing may be acceptable — the simplicity has genuine value. But as soon as volume grows, blended pricing is almost always more expensive.

Negotiating Your Markup

Once you're on IC++, the only lever is the acquirer markup. To negotiate effectively:

  • Know your volume. Acquirers price by volume bracket. Know your monthly average and use it as the anchor in every conversation.
  • Know your card mix. A predominantly debit merchant is less risky and cheaper to process — make that case explicitly.
  • Have competing offers. A competing term sheet from another acquirer is the single most effective negotiating tool. Acquirers know the market and will move if they believe you'll switch.
  • Push for annual reviews. Build pricing review clauses into your contract. Volume typically grows — your markup should decrease accordingly.

The benchmark

For a merchant processing £250k/month with a standard risk profile and a clean card mix, a fair IC++ markup is 0.10–0.20%. If you're paying 0.40%+, you're overpaying and have room to negotiate. If your acquirer won't move, that's the signal to switch.

FAQ

Common questions answered.

Interchange-plus (IC++) is a card processing pricing model that separates the cost into three visible components: the interchange fee set by Visa or Mastercard, the card scheme assessment fee, and the acquirer's markup. Unlike blended pricing, each component is listed separately on your statement so you can see exactly what you're paying and to whom.

For most merchants processing above £10,000 per month, IC++ is cheaper over time — especially if you accept a mix of debit and credit cards, or have customers on premium cards. Blended rates bundle all card types into one flat rate, which means you subsidise premium card fees even when customers pay with cheap debit cards. With IC++, debit transactions cost considerably less than credit.

Acquirer markups vary by merchant size, risk profile, and volume. For lower-volume merchants, expect markups of 0.3–0.6%. For mid-market merchants processing £500k+ per month, markups of 0.10–0.25% are achievable. High-volume enterprise merchants can negotiate markups below 0.10%. The markup is where your negotiating power lies — interchange rates are non-negotiable.

Scheme fees are charged by Visa and Mastercard for access to their networks and are non-negotiable. They include assessment fees, processing integrity fees, and various surcharges for cross-border or premium card transactions. They typically add 0.05–0.15% to your total cost. They're not hidden — on IC++ statements you'll see them listed explicitly.

You can ask your existing acquirer to renegotiate your contract to IC++ terms, or use switching as leverage to get a better overall deal. Many merchants don't realise they can simply request this. If your current acquirer won't offer IC++, that's useful information — it often means they're profiting significantly from your blended rate. Working with a payment consultant gives you benchmarks to understand whether any offer is genuinely competitive.

Find out if your rates are competitive

Use our free PSP Rate Audit to benchmark your current pricing against market rates — or speak to a consultant who can review your statements and tell you exactly where you stand.

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