Key Factors Affecting Merchant Fees
- Specific business categories (MCCs) may be eligible for reduced fees.
- In-person transactions usually have lower costs than online, mail, or telephone order (MOTO) transactions, thanks to the reduced risk of fraud.
- Higher monthly transaction volumes provide greater leverage for negotiating lower fees. Generally, transactions involving high-volume cards tend to have lower average costs.
- The cost of debit card transactions depends on the value of the transaction.
Different card types come with varying interchange and scheme fees. Typically, business, international, premium rewards, and American Express cards have higher fees than standard cards, while debit cards are usually the least expensive."
- Additional services, like integration with POS systems and MOTO processing, may result in extra charges.
- This is a crucial negotiable element with your acquirer, though it accounts for only a small fraction of your overall costs.
- These are fees that acquirers and banks may impose to boost their profits without delivering extra value to the merchant.
Surcharging Information
- A surcharge is an extra fee added to customer transactions to cover card payment processing costs, whether for in-person or online payments.
- Merchants are permitted to charge only up to the Cost of Acceptance (COA) for processing card payments."
- To offset the expense of accepting card payments.
- The Reserve Bank of Australia (RBA) oversees card payment surcharges.
- Merchants can surcharge up to the Cost of Acceptance (COA) for each card type, as detailed in monthly merchant statements.
- Surcharges may be applied at the point of sale.
- Merchants can apply a surcharge up to the Cost of Acceptance (COA) for each card type, as outlined in their monthly merchant statements.
- Internal expenses such as wages and electricity cannot be included in the Cost of Acceptance (COA).
- PAY4PAYMENT SOLUTION provides a reporting tool to calculate the Cost of Acceptance (COA) for new merchants and conducts a review after 3 months to ensure the surcharge rate remains reasonable.
- The Cost of Acceptance (COA) is calculated for each Merchant ID (MID). For franchises or multiple stores under the same legal entity, you can average the surcharge rate across locations by card type. However, the COA for each individual MID cannot be averaged.
- Merchants can decide not to pass on COA fees to customers but must adhere to regulations if they choose to implement a surcharge.
- Utilize our surcharge tool to calculate and adjust your rate monthly, which is especially beneficial for businesses with fluctuating transactions.
- The Australian Competition and Consumer Commission (ACCC) may act if surcharges exceed the Cost of Acceptance (COA). For more information, visit rba.gov.au."
- Merchants can apply a flat or fixed surcharge, provided it does not exceed the Cost of Acceptance (COA) for any transaction."
- Debit Transactions: These occur when using an EFTPOS key card or Scheme debit card with CHQ or SAV options.
- Credit Transactions: These occur when selecting 'credit' on the terminal, often with tap payments.
For more information
RBA Information
- RBA's Method for Calculating the Average Cost of Card Acceptance Across Different Merchant Pricing Plans
- RBA Standards for Applying Surcharges
ACCC Information
- Overview of RBA’s Calculation of the Average Cost of Card Acceptance for Various Merchants and Surcharge Information
- ACCC’s FAQ"