Reducing Credit Card Merchant Fees in Australia

Why Fees Matter?

Credit card merchant fees can quickly add up, especially with consumers preferring cashless payments. According to the Reserve Bank of Australia, the weighted average merchant service fee for credit card transactions was 0.89% as at March 2023. By contrast, the average debit (EFTPOS) transaction fee was just 0.21%. Using this as a benchmark can help you ask: what are typical merchant fees for cafés in Australia?

Similarly, online credit card processing fees for online business Australia often attract gateway fees on top of the standard rate. With the number of EFTPOS terminals in Australia growing by 269% since 1998—reflecting the shift to cards—the need to calculate business credit card fees Australia accurately is more important than ever.

Read more : The Rise of Cashless Payments: What It Means for Your Restaurant (eats365pos.com)

Understand Fee Components and Regulations

Effective cost management starts with understanding merchant statement fees Australia. Your statement will break out:

• Interchange fees: Set by issuing banks based on card type.

• Scheme fees: Charged by card networks such as Visa and Mastercard.

• Acquirer markup: The margin your payment processor or bank adds.

Once combined, these determine your total merchant service fee. Under ACCC guidelines, any surcharge you apply must not exceed the cost of acceptance, must be clearly disclosed at the point of sale and on the final bill, and must not be excessive.

Compare Provider Rates

To find the cheapest merchant services in Australia with no hidden fees, follow these steps:

• Request an interchange-plus fee schedule rather than a flat-rate quote.

• Check for monthly statement-keeping, terminal rental, batch processing and chargeback fees.

• Compare eftpos and credit card fees by asking for average rates by transaction type.

• Use industry forums or spreadsheets to compare credit card merchant fees Australia across banks and payment providers.

Spot Hidden Fees in Merchant Agreements

Even with a low headline rate, agreements may include:

• Statement-keeping or membership fees.

• EFTPOS terminal rental or purchase charges.

• Batch settlement fees.

• Chargeback or non-member fees.

Create a checklist to review terms and conditions and negotiate the removal of any unexpected line items. 

Customer Views on Fees

Customer sentiment towards credit card surcharges has shifted:

• A 2023 PYMNTS study found only 21% of customers said their satisfaction fell after paying a surcharge.

• In 2022, 85% of consumers paid surcharges without issue or complaint.

Under ACCC rules, any surcharge must be displayed at the entry point and clearly shown on the final bill, helping to maintain trust and reduce complaints.

Surcharge Examples in Business

Australian venues typically choose between:

• Flat-fee surcharges: Align with your provider’s fixed per-transaction cost.

• Percentage fees: Mirror your exact merchant service fee (interchange-plus rate).

Recent research covering over 66,000 Australian businesses shows surcharging by sector (May 2023):

• 40% of cafés and restaurants levied surcharges (up from 25% in May 2022).

• 41% of pubs and bars charged surcharges (up from 29% in May 2022).

• 26% of fast-food venues added card surcharges (up from 16% in May 2022).

Best Ways to Negotiate Lower Merchant Fees

Hospitality operators can reduce fees by:

• Leveraging higher monthly transaction volumes to negotiate lower rates with banks Australia.

• Bundling POS and payments to secure package discounts and best merchant facility rates Australia.

• Switching to interchange-plus pricing models.

• Asking acquirers to waive or reduce non-core fees (statement-keeping, terminal rental).

• Reviewing and renegotiating contracts annually.

• Shopping around for competitive quotes.

By applying these strategies, you can significantly reduce merchant service fees in Australia and protect your bottom line.