Blended pricing
Also known as: Blended rate
Blended pricing charges a merchant one headline rate, or a few, that cover interchange, scheme fees and the acquirer's margin together. It is simple to read but hides the split. In the EU, acquirers must offer itemised charges by default, so blended pricing needs the merchant's written request.
Last reviewed
Example
Illustrative numbers only. A merchant pays 1.0% on every consumer card sale and 2.0% on business and non-EU cards. Within each group, the acquirer averages its own costs across the cards it sees.
A single rate is easy to love. One number, one line, no surprises on the first day.
Blended pricing means the merchant service charge is quoted as one rate, or a short list of rates, instead of being split into its parts. The acquirer sets the rate high enough to cover the interchange fees and scheme fees across the merchant's card mix, plus its own margin. The UK regulator, which calls this structure "standard pricing", explains the catch: the same headline rate can apply to transactions that attract different interchange fees, so what the acquirer earns varies from one sale to the next.
Blended is not quite the same as a flat rate. A flat rate is one percentage for every card. Blended usually means a few rates, for example a different headline rate by card type, sometimes with a fixed fee per payment, as the UK regulator's examples of standard pricing show. Both hide the split, and in EU law both are blended merchant service charges under Article 9.
On the statement, a blended contract is the shortest one. A few lines, a few percentages. Extra fees for chargebacks or refunds can still appear separately.
The European rule is the part merchants miss. Under Article 9 of the Interchange Fee Regulation, acquirers must offer and charge individually specified charges for each category and brand of card, "unless payees request the acquirer, in writing, to charge blended merchant service charges". Blended is therefore a choice the merchant makes, not the default. In the survey behind the Commission's 2020 review, about 60% of merchants offered the unblended option chose it.
What merchants get wrong is treating a blended rate as a fixed price for every card. It is an average. If your card mix shifts towards more expensive cards, the average no longer fits. The Commission also noted that, on blended fee schedules, interchange savings were expected to reach merchants only gradually, as contracts adjusted.
For a merchant with a steady mix and no appetite for reading a statement, blended can be the right trade. Choose it knowingly, and put it in writing.
A simple price is not always a low one. It is just a price you did not have to read.
