What is Wholesale Pricing?
With Best Rate Review you’re gaining access to the wholesale cost of the credit card, allowing you to see exactly the card types you accept and their associated cost. No markup, no basis points.
Put simply, Wholesale Pricing is the true cost (aka Interchange) of the card as agreed between the issuing bank and the credit card association (Mastercard, Visa, etc). This is the actual cost of each card that is used to purchase the merchant’s goods. The cost of this card is determined based on its associated risk and rewards. Every merchant pays the same fee for every card.
For example, a cash back credit card will be more expensive to the merchant than a credit card that has no rewards. Even better is a debit card, which is just .05% when swiped or dipped in person. This is arguably better than cash since the money is sent right to your bank account, which means no trips the bank or storing cash on premises.
Interchange has the greatest level of transparency, as it breaks down each card accepted and lets you, the merchant, review this information.
What is Interchange Plus (aka Pass Through or Cost Plus)?
Interchange Plus combines the true cost of the card + the processor’s fees. The “plus” is added to all card types and can’t be avoided. It’s in effect a risk premium added by the credit card processing company which allows them to do business and operate.
However, while Interchange is a set price (aka the raw cost) based on the cards you accept, the “plus” component is decided by the processor. This is often where we see “padded” or added cost unbeknownst to the merchant.
In our experience, and based on analysis, we often determine that the Interchange rate that is reflected on the statement is not accurate or up to date, which in turn often means an increased cost to the merchant.