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Interchange++ Pricing Explained: What Every Business Should Know Before October 2026
With all major card schemes set to implement no-surcharge rules from 1 October 2026, understanding the true cost of accepting digital payments has never been more important.
11 Aug 2026
One of the key considerations for merchants is whether they are on a blended (flat-rate) pricing plan or an Interchange++ (IC++) pricing plan. Neither model is inherently better than the other. They are simply different approaches to pricing card transactions, each offering its own benefits and trade-offs. Understanding how these pricing structures work can help you make a more informed decision about which option best suits your business.
Most businesses only see one number.
Ask a business owner what they pay to accept card payments and you will usually get a simple answer: They pay somewhere between 0.90% and 1.6%. The reality is more complicated. Not every card transaction costs the same. A $5 coffee paid for with an Australian debit card might cost very little to process. A $500 purchase made with an overseas premium rewards card can cost significantly more.
With a blended pricing plan, those costs are averaged into a single rate. With Interchange++, they're passed through at their actual cost + the acquirer's/provider margin. That's the fundamental difference.
Interchange++ (often called IC++) is a pricing model where each transaction is priced according to its genuine underlying cost. The Reserve Bank refers to these as unblended pricing plans. In simple terms:
Interchange + Scheme Fees + Provider Margin = Total Cost
Rather than one fixed percentage for every payment, the cost varies depending on the type of card used. Let's break down those components.
1. Interchange
Interchange is the fee paid to the bank that issued your customer's card. It's typically the largest component of card acceptance costs and varies considerably depending on:
- Debit vs credit cards
- Australian vs overseas cards
- Standard vs premium rewards cards
- Consumer vs commercial cards
These rates are set by card schemes and issuing banks and are published publicly by Visa and Mastercard.
2. Scheme fees
Scheme fees are charged by the payment networks themselves, such as Visa, Mastercard and eftpos. These fees cover access to the network and transaction processing. They're generally smaller than interchange fees, but there are multiple fee categories and they can change over time.
3. Your provider's margin
This is the portion retained by your payments provider for delivering the service. Unlike interchange and scheme fees, which are largely outside a provider's control, this is the component that providers compete on, and that merchants can often negotiate. What does this look like in practice?
Imagine a customer makes a $100 purchase using a standard Australian credit card. Under IC++, the cost might look something like:
- Interchange: $0.30
- Scheme fees: $0.10
- Provider margin: $0.40
Total: $0.80
If you're paying a flat blended rate of 1.4%, the same transaction would cost: Total: $1.40
In this example, IC++ is cheaper. But the comparison can easily go the other way. If a customer pays with a premium, corporate card or an overseas credit card, the underlying costs may exceed 1.4%. In that scenario, a blended rate could work better.
That's why the right pricing model often depends on the type of customers a business serves.
IC++ vs Blended Pricing:
Pros and Cons.
Neither model is perfect. They simply prioritise different things.
Why some businesses prefer IC++:
Greater transparency: You can see where your money is going. Instead of a single rate, costs are broken into their individual components, making it easier to understand what's driving your payment expenses.
Cost reductions flow through automatically: when underlying card costs fall, businesses on IC++ typically receive those savings automatically because charges reflect the actual costs being incurred.
Easier provider comparisons: because the provider's margin is clearly separated from other costs, it's easier to compare competing payment providers on a like-for-like basis.
Why some businesses prefer Blended pricing:
Simplicity: one rate for every transaction is easy to understand, budget for and reconcile. Many business owners value simplicity over detailed cost breakdowns.
More predictable monthly costs: because the rate doesn't fluctuate based on card mix, it's easier to forecast payment expenses.
Protection from expensive card types: if your customers frequently use premium, corporate or overseas cards, a competitive flat-rate plan can sometimes shield you from higher processing costs.
The truth is that neither IC++ nor blended pricing is right for everyone. Some businesses value the transparency and potential savings that come with IC++. Others prefer the simplicity and predictability of a flat rate. The best choice depends on the cards your customers use, how you operate, and what matters most to you.
At PayNuts, we offer both options.
We'll review your recent payment data, model both pricing structures, and show you exactly how each would have performed. No estimates. No guesswork. Just a clear comparison based on your real transactions.
Contact PayNuts today and discover whether IC++ or blended pricing is the better fit for your business before the October 2026 changes take effect.
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