How are Interchange Plus (IC+) fees calculated?

How are Interchange Plus (IC+) fees calculated?

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
• Interchange and network fees are set by the card issuers (banks) and the networks (Visa/Mastercard/Discover). With Interchange Plus, these fees are passed onto the restaurant with a small fee applied on top of the "plus" fee.
• Interchange and network fees are different for every card type, e.g. debit, credit, rewards, international, keyed, swiped, etc., and each has its own associated cost. This mix of card costs makes up the card mix.

To see the actual interchange and network fee breakdown for a given month, navigate to Reports > Payments > Processing statements, then select Cost breakdown in the top right corner of the page. The Cost Breakdown report shows fees organized into a Summary section, an Interchange fees section broken down by card type, and a Network fees and assessments section. Fee timing is explicitly labeled — for example, "Interchange - expected" and "Interchange - adjustments" — so you can see the difference between predicted fees and end-of-month true-ups.

• Interchange and network fees are set by the card issuers (banks) and the networks (Visa/Mastercard/Discover). With Interchange Plus, these fees are passed onto the restaurant with a small fee applied on top of the "plus" fee.
• Interchange and network fees are different for every card type, e.g. debit, credit, rewards, international, keyed, swiped, etc., and each has its own associated cost. This mix of card costs makes up the card mix.