What interchange is
Interchange is the cost associated with moving a card transaction through the payment system to the issuing bank. The amount is affected by the card and the transaction. A basic debit transaction, a premium rewards card and a manually keyed commercial card may all carry different interchange costs.
That variability is one reason processing statements can feel impossible to compare. The business does not choose which cards customers pull out of their wallets.
What processor markup is
The processor markup is the processor-controlled pricing layered on top of the underlying card costs. On a clean interchange-plus statement, this may appear as something like 0.25% plus $0.10 per transaction. Other accounts may have tiered rates, bundled pricing or a flat-rate arrangement where the markup is harder to isolate.
Processor markup is where a pricing negotiation usually has the most direct effect. If that markup is reduced, the business can save money while the underlying interchange remains the same.
A simple example
Assume a business processes $120,000 in one month. If the processor markup is 0.40%, that percentage alone represents $480 for the month. If the markup were reduced to 0.25%, the difference would be $180 that month, before considering any change to per-transaction or monthly fees.
Interchange would still move up and down with the card mix. The savings came from the processor-controlled layer.
This is why comparing processors by one advertised rate can be misleading. The rate may describe only one layer of the bill.
How pricing models can blur the difference
Interchange-plus pricing tends to expose the layers more clearly. Tiered pricing groups transactions into buckets such as qualified, mid-qualified and non-qualified, which can make it harder to see the underlying cost. Flat-rate pricing is simple to understand at checkout, but simplicity does not automatically mean the total cost is low for a business with meaningful volume.
No pricing model is automatically wrong for every business. The question is whether the total cost makes sense for that specific account.
Why the distinction matters when you negotiate
If you know which dollars belong to interchange and which belong to processor markup, the conversation changes. You can stop arguing about costs the processor cannot realistically change and focus on the part it can.
That also makes it easier to verify a savings proposal. If a processor offers new pricing, apply the new markup to an old month of transactions and see what the bill would have looked like. That is far more useful than comparing two sales pitches.
What Tenmile looks for in the markup
Tenmile looks for the processor's percentage markup, per-transaction markup and account-level fees separately from interchange. If older statements are available, the review also checks whether that pricing has changed over time without a clear reason.
This is why a quote built around one low percentage can be misleading. The processor's actual margin may be spread across more than one line.