Stripe offers two pricing models: its well-known flat rate and a lesser-known interchange plus option. Most merchants default to the flat rate without realizing there’s a more transparent — and often cheaper — way to pay for payment processing.
As a business owner, you can’t afford to ignore the impact of processing fees on your bottom line. Every transaction chips away at your profits, and the difference between pricing models can mean thousands of dollars saved or lost each year.
So the question is: are you on the right pricing plan, or is Stripe’s default costing you more than it should?
Understanding Interchange Plus Pricing
To grasp why interchange plus pricing could benefit your business, you need to understand how it works. Interchange plus pricing breaks down your payment processing fees into two main components: the interchange fee and the processor’s markup.
The “Interchange”
Interchange fees form the base cost of processing a transaction. Card networks like Visa and Mastercard set these fees, and they vary depending on factors like card type (credit vs. debit, rewards vs. standard), transaction method (online vs. in-person), and merchant category. Your payment processor can’t control or negotiate these fees — they are fixed by the networks.
For example, a standard Visa credit card transaction online might carry an interchange rate around 1.65%, while a regulated debit card could be as low as 0.05% + $0.22. That’s a massive difference — but on a flat-rate plan, you’d pay the same fee for both.
The “Plus”
The “plus” refers to the processor’s markup. This is a transparent, agreed-upon fee charged on top of the interchange rate. You’ll typically see this expressed as a percentage plus a flat fee per transaction, such as “interchange + 0.3% + $0.10.” This is the only portion of your processing costs that is negotiable.
How It Differs from Flat-Rate Pricing
This pricing model differs significantly from flat-rate structures like Stripe’s default plan. If you’re unfamiliar with how Stripe’s payment processing actually works under the hood, the short version is this: Stripe bundles all costs into a single fee — currently 2.9% + $0.30 per online transaction in the U.S., with card-not-present transactions running as high as 3.4% + $0.30 for manually entered payments. While flat-rate pricing simplifies billing, it often results in higher overall costs because you pay the same rate regardless of the actual interchange cost of each transaction.
Interchange plus pricing offers several advantages:
- Transparency: You see exactly what you’re paying in interchange fees and processor markup on every transaction. There’s no guessing what’s bundled into a single rate.
- Cost-effectiveness: For many businesses — especially those with higher average transaction values or significant debit card volume — interchange plus often results in lower overall fees. Check out our full Stripe fees breakdown and comparison to see how the numbers play out in practice.
- Flexibility: As your business grows, you can negotiate better rates on the markup portion of your fees without needing to hit the $100K+/month threshold that Stripe requires for custom pricing conversations.
How Stripe Handles Interchange Plus
Stripe does offer an interchange plus pricing model — but it’s not what most merchants are on. By default, new Stripe accounts are set up on the standard flat-rate plan. To access interchange plus (which Stripe sometimes calls “IC+” or “network cost plus”), you generally need to contact Stripe’s sales team and qualify based on volume.
Here’s what that means in practice. On Stripe’s flat-rate plan, you pay the same 2.9% + $0.30 whether your customer uses a low-cost debit card or a high-reward premium credit card. The interchange fee on those two transactions could differ by over a full percentage point — but you’d never know it, because the flat rate absorbs everything into one number.
On Stripe’s IC+ plan, the actual interchange and network fees are passed through to you, and Stripe adds its own markup on top. If interchange rates go down — as they did in Canada in October 2024 when the government negotiated reduced rates with Visa and Mastercard — merchants on IC+ see those savings automatically. Merchants on the flat-rate plan don’t. Stripe explicitly stated it would keep its standard pricing the same despite the interchange reduction, citing increases in other network costs.
This is a fundamental limitation of flat-rate pricing. When costs go down, the savings stay with the processor. When costs go up, the processor can raise your rate. Either way, you have no visibility into what’s actually happening underneath.
It’s also worth understanding that Stripe isn’t a merchant account. It’s a payment aggregator, which means your transactions are processed under Stripe’s master merchant ID rather than your own. This pooled model is what allows Stripe to offer instant onboarding and simplified pricing — but it also means you have less control, less transparency, and less leverage when it comes to your rates.
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How Shopify Makes It Harder to Reap the Benefits
Shopify’s relationship with Stripe creates a complex situation for merchants seeking better payment processing options. Shopify powers its native Shopify Payments with Stripe’s backend infrastructure, while simultaneously penalizing merchants who try to use alternative processors.
This arrangement poses several challenges for business owners:
Additional Transaction Fees for Alternatives: If you use a third-party payment processor instead of Shopify Payments, Shopify charges additional transaction fees ranging from 0.5% to 2% per transaction depending on your plan. On the Basic plan, this 2% penalty means a business processing $50,000/month through an external processor would pay an extra $1,000/month — $12,000 annually — just for choosing their own processor. This is on top of whatever the external processor already charges.
Limited Payment Flexibility: Shopify restricts your ability to use other processors when Shopify Payments is available in your region, effectively funneling you toward their native Stripe-powered solution.
Feature Discrepancies: When you opt for a non-Stripe processor on Shopify, you may lose access to certain features. Shopify reserves some of its most advanced tools and integrations for users of Shopify Payments, potentially limiting your store’s functionality.
Switching Difficulties: Shopify doesn’t make it easy to switch away from their native payment solution. The platform’s design encourages you to stick with Shopify Payments, creating friction if you decide to explore other options.
Integration Challenges: While Shopify supports some third-party processors, the setup often requires more technical work than simply activating Shopify Payments. This complexity can deter less tech-savvy merchants from exploring alternatives.
The result is that Shopify’s penalty structure, combined with Stripe’s flat-rate pricing on the backend, creates a situation where merchants are paying more than they need to — and have limited options to change that within the Shopify ecosystem. If you’re locked into Stripe through your e-commerce platform, it’s worth reading our breakdown of whether Stripe is safe and the risks it poses for online merchants.
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Frequently Asked Questions
What is interchange plus pricing?
Interchange plus pricing is a transparent payment processing model that separates the base interchange fee (set by card networks like Visa and Mastercard) from the processor’s markup. Unlike flat-rate pricing such as Stripe’s 2.9% + $0.30, interchange plus shows you exactly what you pay in network costs versus processor fees. This model typically saves businesses with higher transaction volumes or larger average order values.
Does Stripe offer interchange plus pricing?
Yes, but not by default. Most Stripe merchants are on the standard flat-rate plan. Stripe’s interchange plus option (sometimes called IC+ or network cost plus) is generally available to higher-volume businesses who contact Stripe’s sales team directly. On the IC+ plan, actual interchange and network fees pass through to you with Stripe’s markup added on top.
Is Stripe a merchant account?
No. Stripe is a payment aggregator, not a dedicated merchant account provider. Stripe pools merchants under a single master account, which simplifies onboarding but gives individual businesses less control over their processing rates, reserve policies, and account stability.
Does Shopify charge extra fees for using third-party payment processors?
Yes. Shopify charges additional transaction fees ranging from 0.5% to 2% per transaction (depending on your plan) when you use a third-party payment processor instead of Shopify Payments. On the Basic plan, this fee is 2%, added on top of whatever your external processor already charges.
What is the best alternative to Stripe for e-commerce businesses?
Dedicated merchant account providers are the best alternative for most e-commerce businesses that have outgrown Stripe. They offer interchange plus pricing with full transparency, negotiable rates as your volume grows, greater account stability (especially for high-risk merchants), and a direct relationship with your processor. Businesses processing over $10,000/month typically see meaningful savings by switching from flat-rate aggregators to interchange plus merchant accounts.
Is Stripe safe for online merchants?
Stripe is a legitimate processor, but its aggregator model carries risks — particularly for businesses in higher-risk industries. Stripe can freeze funds, impose reserves of 10–25%, or terminate accounts with limited warning. A dedicated merchant account offers more predictability and stability.
