blended pricing
Blended pricing is a card pricing model in which the business pays one flat rate, or a small number of rates, on every transaction, with interchange, scheme fees and the acquirer's margin rolled into it. It is simple to understand and hides what each part costs.
A blended rate says 1.5% and means it, whatever card is used. The acquirer pays the real interchange and scheme fees underneath, which vary widely by card type, and keeps the difference. On a domestic debit card that difference is large; on a foreign credit card it may be nothing or negative. The acquirer prices the blend to the mix it expects and to the risk it is taking.
Why it matters to a business: blended pricing is easy to compare on the headline and hard to compare on substance. The PSR found that most small merchants were on blended pricing and could not see the interchange element on their statements, which was part of why they rarely switched. If your customers pay mostly with domestic debit cards, a blended rate is probably paying for other people's commercial cards. Ask for the effective rate from three months of statements, and ask for an interchange-plus quote alongside.
For a software platform, a blended rate to its customers is often the right thing to offer, because the customers are small and want a number they can remember. The platform should still know the mix underneath, because its own cost is interchange-plus and the gap between the two is its margin, customer by customer.