Flat-rate vs interchange-plus: how the two pricing models compare

Almost every card payment plan in Australia is priced one of two ways: a single flat rate, or interchange-plus. They can lead to very different bills for the same business — and the interchange cut that landed on 1 October 2026 changed how they compare. Here is how each works, the trade-offs, and what the reform means for both.

Compayr's Pass Through Tracker shows the difference in practice. As at 21 October 2026, 7 of the 20 card rates it tracks had been cut since the reform and 13 had not. CommBank's interchange-plus customers received the cut automatically.

The two models

Flat-rate charges one blended percentage on every transaction, whatever card is used. A cafe might pay, say, a single rate on debit, credit and premium cards alike. The provider absorbs the underlying variation between cards.

Interchange-plus (sometimes called cost-plus) unbundles the price into three visible parts: the wholesale interchange set by the card networks, the scheme fees, and a fixed provider margin on top. You pay the true underlying cost of each card, plus a set markup.

Flat-rate: the trade-offs

• Simple and predictable — one number, easy to reconcile, no surprises card-to-card.
• Can be cheaper on an expensive card mix — if you take lots of premium/rewards credit, a flat rate can smooth that out.
• But you may overpay on cheap transactions (like eftpos debit), because you pay the same rate whether the underlying card was expensive or not.

Interchange-plus: the trade-offs

• Transparent — you can see exactly what is wholesale cost and what is the provider's margin.
• Rewards a cheap card mix — debit-heavy businesses often pay less, especially with least-cost routing enabled.
• Passes wholesale changes straight through — when interchange falls, your cost falls automatically.
• But it is more variable month to month, and harder to eyeball than a single rate.

How the October 2026 interchange cut changes the comparison

From 1 October 2026 the RBA caps interchange on domestic consumer credit at 0.3%, down from 0.8% [1]. That is a wholesale cost, so the way it reaches you depends on your model:

• On interchange-plus, the lower cap flows through to your bill automatically — wholesale cost drops, your margin stays the same, so you pay less on affected transactions.
• On a flat rate, nothing changes unless your provider chooses to lower the flat rate. The saving sits with the provider until they re-price.

This is the part few explain: the same reform can reach two businesses very differently depending on which model they are on. If you are on a flat rate, it is worth asking your provider whether — and when — they will pass the lower caps on.

Which tends to suit whom

There is no universally "better" model — it depends on your numbers:

• Lower-volume or simplicity-first businesses often value the predictability of a flat rate.
• Higher-volume or debit-heavy businesses often pay less on interchange-plus, particularly with least-cost routing switched on.

The only way to know is to compare both at your own turnover and card mix.

How to compare them fairly

Whatever the model, the honest yardstick is your effective rate — your card fees divided by your card turnover. Compayr ranks the providers we track on estimated card acceptance cost at your numbers, so a flat-rate plan and an interchange-plus plan are measured on the same basis, with terminal rental and hardware shown separately (they are equipment costs, never part of the ranked figure). See how we compare.

Compare both models at your volume — enter your turnover and card mix and see the providers we track ranked by estimated card acceptance cost. Compare now →

Related reading: least-cost routing, how much it costs to accept cards, and eftpos vs credit cards.

Whether a lower interchange cap reaches you depends on your provider and plan — figures are indicative and carry the date each was verified; confirm current pricing directly with the provider. General information, not financial advice.