FBOs have historically relied on credit card processing from a fuel supplier or, in many cases, a local bank. The pricing is usually based on the traditional credit card ISO (Independent Service Organization) model where you were quoted something like 2.50% or 2.75% plus other fees, with concepts like qualified and non-qualified, and that was that. Simple, but not always the most cost-effective or transparent option.
X-1PAY uses a modern interchange++ model, similar to how PayFacs (Payment Facilitators, think Stripe) work, but designed for aviation and tightly integrated with X-1FBO. This article explains what that means in practical FBO terms.
How the traditional ISO-style model works
The traditional model usually sounds something like:
“We can do 2.89% across the board, maybe a few cents per transaction. Some cards are qualified, some are not, but you do not need to worry about it.”
Behind that simple rate:
The supplier, bank or ISO pays interchange and network fees to the card brands and banks.
Those costs are bundled together and a margin is added.
You see a flat or tiered rate, not the individual components.
From their side this is perfectly rational. If they are giving you one or two simple rates to cover hundreds of different card types and scenarios, common sense says they will:
Estimate the likely mix of cards and transaction types, and
Set the rate at a level that covers their cost and leaves a reasonable profit over time.
That means some transactions will sit close to the true underlying cost, while others will be priced above it. You get simplicity, but you give up visibility into where you could be paying less.
What X-1PAY does differently for FBOs
X-1PAY takes the PayFac / interchange++ model and applies it specifically to the realities of FBO operations.
1. True pass-through of base costs
For each transaction, X-1PAY passes through:
The exact interchange for that card type and method
The per-transaction fees from the networks
The network / assessment fees from Visa, Mastercard, Discover and American Express
These are the same fees every processor pays. We simply let you see them.
2. A clear X-1PAY fee on top
On top of those pass-through costs, X-1PAY charges a transparent processing fee, for example:
A small percentage (basis points) on the ticket, plus
A small per-transaction fee in cents.
That is the only portion that belongs to X-1PAY, and it is clearly defined in your agreement and on your reporting.
3. Turning operations into savings
Because X-1PAY is integrated directly into X-1FBO, we can help you:
Move more transactions to card present (swiped or chip) instead of keyed. (This is very important and offers excellent hardware for fast and easy transactions)
Ensure batches are settled within 24 hours whenever possible.
Improve data quality on commercial and government cards so they qualify for better interchange categories. We can actively manage the data and drive behavior that can improve your rates.
In a bundled flat-rate program, those improvements mostly benefit the party that set the rate. In an interchange++ model, improvements show up as a lower effective rate on your side.
Simple side-by-side examples
These examples are illustrative, not actual quoted rates, but they show how the models behave.
Example 1: Large Jet A sale on a premium corporate credit card
Ticket: $5,000
Card: High-end corporate rewards credit, swiped
Flat ISO-style rate: 2.75% + $0.15
Flat model
2.75% of $5,000 = $137.50
Plus $0.15 per transaction
Total cost: $137.65
Sample interchange++ structure
Interchange: 2.30% + $0.10
Network / assessments: 0.13%
X-1PAY fee: 0.25% + $0.05
Total percent: 2.30 + 0.13 + 0.25 = 2.68%
Total cents: $0.10 + $0.05 = $0.15
2.68% of $5,000 = $134.00
Plus $0.15 per transaction
Total cost: $134.15
On a large corporate ticket, the numbers are close, but you can see how the effective rate starts to track the true underlying cost.
Example 2: Smaller Avgas sale on a regulated debit card
Ticket: $75
Card: Regulated debit, swiped
Flat ISO-style rate: 2.75% + $0.15
Flat model
2.75% of $75 ≈ $2.06
Plus $0.15
Total cost: about $2.21
Sample interchange++ structure
Interchange: 0.05% + $0.22
Network / assessments: 0.13%
X-1PAY fee: 0.25% + $0.05
Total percent: 0.05 + 0.13 + 0.25 = 0.43%
Total cents: $0.22 + $0.05 = $0.27
0.43% of $75 ≈ $0.32
Plus $0.27
Total cost: about $0.59
Here the difference is much more noticeable. On transactions where the underlying cost is low, a flat rate that has to cover everything ends up well above what the transaction actually costs to process.
How to think about the two models
Traditional supplier / ISO-style flat or tiered pricing
Pros
Straightforward to quote and understand at a high level.
One or two simple rates that do not change often.
Tradeoffs
The rate has to be set at a level where the provider will consistently cover their costs and earn a margin across a very mixed portfolio.
Some transactions end up priced above their underlying cost, and it is hard to see where you have room to improve.
Interchange++ with X-1PAY
Pros
You see what you actually pay Visa, Mastercard, Discover and American Express.
X-1PAY’s fee is clearly separated and can be evaluated on its own.
As more transactions qualify for better interchange, your effective rate moves down rather than staying fixed.
Integration with X-1FBO means operational improvements translate directly into lower cost.
Tradeoffs
More detailed than “2.89 percent all in,” so there is a short learning curve.
Your effective rate moves slightly with your card mix and transaction patterns instead of being a single static number.
Bottom line for FBOs
Every program, whether offered by a supplier, a bank, or a PayFac, has to do the same thing: cover interchange and network fees and create a sustainable margin for the party providing the service.
The question for an FBO is how much visibility you want into that structure.
X-1PAY’s interchange++ model:
Shows you where your processing dollars go.
Makes the X-1PAY portion explicit.
Lets you use your own operations and card mix to drive your effective rate down over time, instead of treating processing as a black box.