Flat-rate vs interchange-plus pricing — which is cheaper?

How each model works

Flat-rate pricing charges a single percentage across every card type, no matter what the underlying cost of that card actually is. Interchange-plus separates things out: you pay the real interchange that applies to each transaction, plus a fixed margin your provider discloses up front. Flat-rate trades transparency for predictability; interchange-plus trades simplicity for visibility into what each layer really costs.

Why your card mix decides it

There’s no universal winner. If much of your turnover is low-cost debit, a flat rate can overcharge relative to what interchange-plus would yield — because the flat percentage is averaged to cover pricier credit and premium cards too. If your mix skews toward expensive cards, a flat rate can look attractive by comparison. Volume matters as well: the fixed margin in interchange-plus often suits steadier or higher-volume businesses, while very small or irregular takings may value flat-rate simplicity. We don’t attribute specific rates to named providers — the right model is genuinely individual.

The 2026 angle

Because interchange-plus passes interchange straight through, any reduction from the 1 October 2026 caps shows up in your cost almost mechanically. A flat rate, by contrast, can absorb a lower interchange into the provider’s margin, so you might not see the benefit unless the headline rate itself is renegotiated. If exposure to the 2026 cuts matters to you, that difference is worth weighing. All rates here are indicative and this is general information, not advice.

Source: RBA Review of Merchant Card Payment Costs and Surcharging — Conclusions Paper (March 2026).