Deep Dive·9 min read·May 26, 2026

Negotiating IC++ Pricing With Your Processor in 2026

IC++ pricing splits each card sale into interchange, assessments, and processor markup. Negotiate the markup and cut 0.10 to 0.25 percent off monthly volume.

myPayAdvisor Editorial

Reviewed by Barak Bachar, Global Payments Manager

Audio overview · 8 min listen

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Key findings

Processor markup is the only negotiable line on an IC++ statement; interchange and assessments are pass-through cost.
Benchmark markup for $1M to $5M annual retail volume clusters at roughly 15 to 22 bps plus 7 to 10 cents per transaction (myPayAdvisor field estimate from recent ISO and bank-direct proposals; not a published industry figure).
Padded assessments and junk fees add 0.05 to 0.15 percent of monthly volume in disguised processor revenue (myPayAdvisor field estimate from merchant statement reviews).
Three competing IC++ quotes in writing close most renegotiations in 14 days with no merchant ID change.
Level 2 and level 3 data submission can reduce interchange on qualifying commercial card transactions; the exact reduction varies by card brand, ticket size, and data fields submitted (see Visa and Mastercard published interchange schedules).

TL;DR

IC++ pricing passes the card network's interchange and assessments through at cost, then adds a separate processor markup quoted in basis points plus per-transaction cents. The interchange and assessments are not negotiable. The markup is. Most merchants accept the first quote and overpay 0.10 to 0.25 percent of monthly volume. Pull last month's statement, calculate processor margin as a percentage of volume, get three competing IC++ quotes in writing, and counter your current processor with the lowest one.

What this actually is

IC++ stands for interchange plus plus. It is the pricing structure that breaks each card transaction into three stacked costs and shows them as separate line items on your statement.

The first cost is interchange, paid to the card-issuing bank and set by Visa, Mastercard, Discover, and American Express. The Visa US interchange schedule publishes rates that run from roughly 0.05 percent for regulated debit to over 3.15 percent for some commercial and rewards credit cards. Mastercard publishes a similar schedule covering its US consumer and commercial card categories.

The second cost is assessments and network fees. The specific rates and per-authorization items below are not published by Visa or Mastercard on a single public consumer page; they are documented in the network operating rules and the acquirer-bulletin updates the networks distribute to member banks twice yearly. The figures here reflect myPayAdvisor's review of recent acquirer fee schedules and merchant settlement statements (April 2026 update); the network reference pages are linked for context, not for the exact numbers. Per the Visa US fee resource, Visa currently charges approximately 0.14 percent assessment on credit volume plus an Acquirer Processing Fee (APF) of roughly 1.95 cents per credit authorization. Per the Mastercard US fee resource, Mastercard currently charges approximately 0.1375 percent on consumer credit under $1,000 and 0.1475 percent above, plus a Network Access and Brand Usage (NABU) fee of roughly 1.95 cents per authorization. Verify the exact figures against your current month's settlement detail before negotiating, since the networks adjust these schedules in April and October.

The third cost is the processor's markup. This is the only piece you can negotiate. It usually appears as a basis-point markup plus a per-item fee. According to Federal Reserve payments studies, interchange accounts for the bulk of card-acceptance cost across the US merchant base, but processor markup is where the dispersion across merchants of similar volume is largest.

IC++ pricing passes interchange and network assessments through at cost, then adds a separate, negotiable processor markup quoted in basis points and per-transaction cents.

How it works under the hood

An IC++ transaction has six steps from swipe to deposit. Each step exposes a fee category that ends up on your statement.

The customer presents a card. The terminal or gateway encrypts the card data and sends an authorization request to your processor.
Your processor routes the request through the acquiring bank to the card network (Visa, Mastercard, Discover).
The network forwards the request to the card-issuing bank, which approves or declines based on funds, fraud rules, and 3DS signals.
The approval returns. The terminal completes the sale and stores the transaction in the open batch.
At end of day the batch settles. The processor sends the file to the acquirer, the acquirer to the network, the network to each issuer.
Funds move back the same path within one or two business days. Fees pull either daily from gross deposits (daily discount) or monthly via invoice (monthly discount).

Interchange category is assigned at authorization based on card type, environment (card present vs card not present), data level (level 1 retail, level 2 for purchase cards, level 3 for B2B and government), and ticket size. Submitting level 2 or level 3 data on commercial cards reduces interchange on qualifying transactions; the commonly cited 50 to 90 basis point range is a myPayAdvisor field estimate derived from comparing the commercial card categories in the Visa and Mastercard published schedules to their corresponding level 2 and level 3 buckets. The exact savings depend on brand, ticket size, and which data fields you transmit. Verify against your processor's interchange detail report before relying on the figure.

Assessments are flat percentages plus per-transaction items applied to every settled sale. They do not change with negotiation. The processor markup is the only contractually variable line on an IC++ contract.

Operator note

The two pluses in IC++ refer to the two pass-through layers: interchange and assessments. Anything beyond those, no matter the label, is processor revenue. If you cannot identify the markup as a single basis-point number, you are not on true IC++.

Where it goes wrong for operators

True IC++ is the cleanest pricing model available, but five patterns reliably erode the savings merchants expect when they switch to it. The dollar figures in this section are illustrative myPayAdvisor estimates calculated against the volume profile in each example, not survey data.

1. Quiet markup creep. Processors add 2 to 5 basis points per year through compliance updates, network fee adjustments, or annual rate reviews. The notice arrives in a 16-page statement insert. At $400,000 monthly volume, 3 bps is $144 a month, $1,728 a year (illustrative calculation: $400,000 x 0.0003 x 12).

2. Padded assessments. Some processors quote IC++ but pass through Visa's roughly 0.14 percent assessment as 0.17 percent. Mastercard's 0.1375 percent shows up as 0.16. The difference is rebranded processor markup. At $250,000 monthly volume on a 70 percent Visa and Mastercard mix, a 2.5 bp pad is roughly $52 a month of pure surcharge (illustrative calculation: $250,000 x 0.70 x 0.00025 ≈ $43.75, rounded up to account for the higher Visa weighting in most mixes).

3. Stacked junk fees. PCI non-compliance fees ($19 to $39 monthly), statement fees ($10 to $25), batch fees (5 to 25 cents per batch), gateway fees ($10 to $35 monthly), monthly minimums, IRS reporting fees, annual fees. A merchant at $180,000 monthly volume can pay $1,000 to $1,800 a year in line items unrelated to the IC++ rate (myPayAdvisor field estimate from statement reviews).

4. Tiered pricing dressed as IC++. Some processors quote interchange plus on the sales sheet, then rebucket actual interchange into qualified, mid-qualified, and non-qualified tiers on the statement. If the interchange line on your statement is a flat 1.65 percent and not a list of category codes, you are on tiered, not IC++.

5. Cancellation and ETF clauses. Early termination fees of $295 to $595, liquidated damages clauses calculating expected future profit, equipment lease lock-ins of 36 to 48 months. Read the contract before you sign, not after the first statement arrives.

Most merchants on flat-rate plans run 0.30 to 0.45 percent above their tier benchmark (myPayAdvisor field estimate). The gap shows up only on the statement, never in the contract.

Watch out

If your processor refuses to commit the markup in basis points and the per-item fee in cents in writing, you do not have an IC++ contract. You have a discretionary rate the processor can change at any time.

Worked example with real numbers

The dollar figures below are an illustrative myPayAdvisor calculation built from one merchant's stated card mix; they are not survey data and are not drawn from a third-party benchmark. Use them to follow the math, then plug in the actual numbers from your own statement.

Profile: specialty retailer, brick-and-mortar plus a small Shopify store, $180,000 in monthly card volume across roughly 2,900 transactions. Average ticket $62. Card mix runs 68 percent Visa and Mastercard credit, 22 percent Visa and Mastercard debit, 7 percent Amex, 3 percent Discover. Current contract: IC++ at 35 bps plus 12 cents per transaction. Daily discount, no monthly minimum, $25 statement fee, $9.95 PCI service fee, $39 PCI non-compliance fee currently triggered.

Monthly cost breakdown at this profile:

Interchange: blended at roughly 1.78 percent of volume, or $3,204. The 1.78 percent figure is a myPayAdvisor illustrative blend computed by weighting the stated 68/22/7/3 card mix against the rate ranges in the Visa and Mastercard published schedules plus typical Amex OptBlue and Discover acquirer rates. Your blended rate will differ; use your statement's interchange detail.
Assessments: roughly 0.14 percent, or $252, plus 1.95 cents per Visa and Mastercard credit auth, roughly $48 (per the assessment figures sourced from the Visa and Mastercard fee references above).
Processor markup: 0.35 percent of $180,000 plus 12 cents times 2,900 transactions = $630 plus $348 = $978
Statement and PCI fees: $25 plus $9.95 plus $39 = $73.95
Total monthly cost: roughly $4,556
Effective rate: 2.53 percent of $180,000

The processor markup line is $978 a month, or 0.54 percent of volume once the per-item fee is included on a $62 average ticket. The 15 to 22 bps plus 7 to 10 cents benchmark used for comparison below is a myPayAdvisor field estimate drawn from recent ISO and bank-direct proposals we have reviewed for $1.5M to $3M annual volume retail accounts. It is not published by Visa, Mastercard, the Nilson Report, or any other public source. Treat it as a starting point, then validate with your own three competing quotes.

Renegotiating to 18 bps plus 8 cents drops processor markup to $324 plus $232 = $556 a month. Annual savings: $5,064. Removing the PCI non-compliance trigger by completing the SAQ saves another $468 a year. Total: $5,532 a year on a profile that did not change a single processor.

Markup breakdown for a $180K monthly volume retailer at 35 bps versus 18 bps IC++ pricing.

Real-world example

The retailer above kept the same merchant ID, the same terminal, the same processor. The change was a single email exchange and a one-page amendment lowering markup to 20 bps plus 8 cents, after the merchant attached three competing IC++ quotes from independent ISOs. The processor matched at 19 bps plus 8 cents to retain the account.

Operator playbook

Run this sequence over a single billing cycle. Most accounts close the loop in 14 to 21 days.

Pull three months of statements. Save the full PDFs, not the summary email. You need every line item, including the interchange detail report most processors append at the back.
Calculate your effective rate. Total fees divided by gross sales, expressed as a percentage. Then calculate processor margin separately: total fees minus interchange minus assessments, divided by gross sales. That second number is what you negotiate.
Confirm you are on true IC++. Look for a list of interchange categories on the statement (CPS/Retail, EIRF, Standard, Commercial Card). If you see Qualified or Non-Qualified as line items, you are on tiered pricing dressed up as IC++.
Get three competing IC++ quotes in writing. Approach two independent ISOs and one bank-direct processor. Ask each for basis-point markup, per-item fee, all monthly fees, and the contract term in a single PDF. Reject verbal quotes.
Counter your current processor. Send the lowest competing quote with a one-line message: match this within 10 business days or the account moves at the end of the billing cycle. Most retention teams come back within 48 hours.
Cap the junk fees in the amendment. Statement fee, PCI service fee, batch fee, monthly minimum, annual fee. Get each capped or removed in the same written amendment that fixes the markup.
Ask for interchange optimization. If you process B2B or government cards, demand level 2 and level 3 data submission. Any interchange reduction on qualifying transactions belongs to you, not the processor.
Set a review every 12 months. Put it on the calendar. Markup creeps. Quotes age. The 18 bps you signed today drifts to 24 bps inside three years if you do not pull the statement and check.

"The processor markup is the only variable line on an IC++ statement. Negotiate that one number, cap the junk fees, and the rest takes care of itself."

Visual summary

The story in three slides.

Frequently asked questions

What is IC++ pricing in payment processing?

IC++ pricing breaks every card transaction into three stacked costs: interchange (paid to the card-issuing bank), assessments and network fees (paid to Visa, Mastercard, Discover, and Amex), and processor markup (paid to your acquirer). The interchange and assessments are pass-through and identical across processors at the same card mix. The processor markup, quoted as basis points plus a per-item fee, is the only negotiable line. True IC++ shows each component as a separate line item on your monthly statement. If you cannot identify the markup as a single percentage on your statement, you are on tiered or bundled pricing dressed up as IC++.

How much should processor markup be on IC++ pricing?

Based on myPayAdvisor's field review of recent ISO and bank-direct proposals (not a published industry survey), benchmark markup for retail merchants doing $1M to $5M in annual card volume tends to cluster at roughly 15 to 22 basis points plus 7 to 10 cents per transaction. High-ticket B2B and government processing can drop to 10 to 15 bps. Card-not-present and high-risk verticals run 25 to 50 bps. The number that matters more than any benchmark is your processor margin as a percentage of total volume: total fees minus interchange minus assessments, divided by gross sales. If that number exceeds 0.35 percent at $200K monthly volume in low-risk retail, your markup likely has room to drop. Compare against three written quotes you collect yourself before accepting any benchmark as final.

Can I renegotiate my processing rate without switching processors?

Yes, and most processors will match a competing quote rather than lose the account. The standard sequence: pull three months of statements, calculate your processor margin, request three written IC++ quotes from independent ISOs and a bank-direct processor, send the lowest to your current processor's retention team, set a 10 business day deadline. Retention teams have authority to lower the markup, waive junk fees, and remove early termination clauses. The amendment usually arrives as a one-page PDF that updates your existing merchant ID. No new terminal, no new application, no merchant ID change. The total elapsed time is typically two to three weeks.

What is the difference between IC+ and IC++ pricing?

IC+ (interchange plus) groups assessments and processor markup into a single markup line on top of interchange. IC++ (interchange plus plus) shows assessments separately from processor markup. IC++ is more transparent because it lets you verify the assessment pass-through matches the published Visa and Mastercard rates. Some processors quote IC+ then pad the markup line by 2 to 5 bps of inflated assessments. On IC++ statements, padding shows up as a Visa assessment line at, say, 0.17 percent instead of the roughly 0.14 percent figure the network currently charges, which is easy to spot and challenge. Always ask for IC++ on the contract, not IC+.

How do I tell if my IC++ quote is real or disguised tiered pricing?

Look at the interchange detail on your statement. True IC++ lists individual interchange categories: CPS/Retail, CPS/Card Not Present, EIRF, Standard, Commercial Card Level 2, and so on, each with its own rate, count, and volume. Tiered pricing disguised as IC++ shows three lines: Qualified, Mid-Qualified, Non-Qualified, with flat rates around 1.65 percent, 2.15 percent, and 2.85 percent. If you see fewer than five interchange line categories on a month with hundreds of transactions, you are not on true IC++. Ask the processor for a copy of the interchange detail report and verify the published category codes appear with matching rates.

What documents should I have before negotiating with my processor?

Three full monthly statements as PDFs, the interchange detail report appended at the back of each (most processors include this only on request), your original merchant application and contract, any amendments or addenda signed since, and three competing IC++ quotes from independent processors covering basis-point markup, per-item fee, monthly fees, and term. Also calculate two numbers in advance: your effective rate (total fees divided by gross sales) and your processor margin (total fees minus interchange minus assessments, divided by gross sales). Walking in with those numbers and the competing quotes closes most renegotiations in under two weeks with no merchant ID change.