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What is Cost-Plus Pricing?

Cost-Plus Payment Processing

Payway uses cost-plus pricing, passing through the interchange rate rather than bundling it in.

Cost-Plus pricing is the best payment pricing processing model. It can reduce your credit card processing fees by up to 20% every month. The benefits of cost-plus pricing (also known as interchange pass through) is that it is totally transparent to and extremely cost-effective.

Cost-Plus pricing is more transparent because it is far more difficult to have hidden costs. In cost-plus pricing, we charge the actual interchange cost then add a markup (i.e., 10 cents). With cost-plus pricing, you'll know exactly what you're paying per transaction.

Cost-Plus Pricing

When you choose Payway, you enjoy absolute transparency from our cost-plus pricing model, also called interchange-plus pricing because the resulting cost is the interchange fee plus the merchant services markup.

Instead of a blended percentage rate, you pay the published interchange rate, a per transaction fee and basis points (one basis point is 0.01%).

When you run the numbers, cost-plus pricing tends to offer significant savings over bundled pricing.

Bundled Pricing

Almost all payment gateways offer merchant accounts as part of their services. Most offer an all-in-one blended rate for the gateway and the merchant account service. Companies usually advertise 2.9% plus $.30 a transaction. This model seems pretty straightforward and is convenient.

However, not all gateways require you to sign up with their merchant in order to get the gateway. Like Payway, these providers are system agnostic and can code their gateway to any acquirer or processor. You can bring your own processor on board if you wish or sign on with one of theirs.

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