Interchange-plus vs. tiered pricing
The alternative is tiered pricing, where the processor groups transactions into "qualified," "mid-qualified," and "non-qualified" buckets with different rates. Tiered pricing hides the actual interchange cost — the processor decides which bucket each transaction falls into, and merchants have no way to verify whether the bucketing is fair.
Tiered pricing is what most generalist high-risk processors quote because the lack of transparency lets them mark up high-margin transaction types invisibly. Interchange-plus is what serious B2B payment infrastructure (Stripe, Adyen, Braintree, Mercury, PeptideRails) uses.
How interchange-plus is quoted
A typical interchange-plus quote looks like: "Interchange + 50bps + $0.10 per transaction." That means:
- You pay whatever Visa/Mastercard sets interchange at (varies by card type: Visa Signature Preferred is ~2.10% + $0.10; Visa Business is ~2.20% + $0.10; debit cards are ~0.05% + $0.22)
- Plus 50 basis points (0.50%) processor markup
- Plus 10 cents per transaction
The effective total depends on your card mix. A merchant with mostly Visa Signature cards will land around 2.6% effective. A merchant with mostly debit cards will land around 1.05% effective. Both are paying the same processor markup.
Why peptide brands should care
Peptide e-commerce skews heavily to Visa Signature and World Mastercard (premium consumer cards with high interchange). This means a peptide brand on a tiered-pricing plan is paying more — much more — than the headline rate suggests, because most of the volume falls into the "non-qualified" tier where the processor's markup is invisible.
An interchange-plus contract removes that ambiguity. Whether the effective rate ends up higher or lower than the tiered alternative depends on the markup negotiated, but the merchant can verify it line-by-line.
How PeptideRails prices
We price on interchange-plus and disclose both components in your underwriting letter. The markup is statement-audited against your current rate — meaning we set markup such that your year-one total cost of ownership is lower than what you're paying now, accounting for both the rate and reserve impact. If we cannot, we decline to onboard.