Question
How are Interchange Plus (IC+) fees calculated?
Answer
Looking for your interchange rates? Your monthly processing statement shows totals. To see interchange and network fees broken down by card type, navigate to Reports > Payments > Processing statements, then select Cost breakdown in the top right corner of the page. The Cost Breakdown report shows a Summary section, an Interchange fees section broken down by card type, and a Network fees and assessments section.
Cost breakdown only shows interchange details for date ranges when your location was on Interchange Plus pricing. If you see a message that your location was not on Interchange Plus pricing for the date range selected, your location was on a different pricing model for those dates.
Example Calculation:
Let's say a restaurant makes a $10 sale with an Interchange Plus pricing structure.
If the card used to pay for the meal has an Interchange rate of 1.80% + $0.20, the restaurant will pay (1.80% x $10) + ($0.20 + 1 transaction) = $0.38 in interchange fees
Let's say for network fees, there is a 0.20% rate charged (this rate is also set by the networks), 0.20% x $10 = $0.02 in Network Fees.
Now let's take a look at the Plus portion of this rate structure.
Using the same example, if the restaurant is paying Interchange (Cost) + 0.50% + $0.10, then the Plus (also known as the markup) would be 0.50% of their volume and the $0.10 per transaction.
On the same $10 sale, the markup will be: (0.50% x $10) + ($0.10 x 1 transaction) = $0.15 in "Plus" fees This gets paid to Toast.
The restaurant will pay $0.55 TOTAL for this $10 transaction