Factors Influencing Merchant Fees
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- Certain business categories (MCCs) may qualify for lower fees.
- In-person transactions generally incur lower costs compared to online, mail, or telephone order (MOTO) transactions due to reduced fraud risk.
- The cost of transactions for debit cards is influenced by the transaction value.
- Different card types have varying interchange and scheme fees. Business, international, premium rewards, and American Express cards generally have higher fees compared to standard cards, with debit cards usually being the least expensive.
- Additional services, such as integration with POS systems and MOTO processing, may incur extra charges.
- This is a key negotiable component with your acquirer but represents only a small portion of your total costs.
- These are fees that acquirers and banks may charge to increase profits without providing additional value to the merchant.
Surcharging Information
Use customer data to build great and solid product experiences that convert.
- A surcharge is an additional fee passed on to customers to cover card payment processing costs, either in-person or online.
- Merchants can only charge up to the Cost of Acceptance (COA) for processing card payments.
- To mitigate the cost of accepting card payments.
- The Reserve Bank of Australia (RBA) regulates card payment surcharges.
- Merchants can surcharge up to the COA for each card type, as shown on monthly merchant statements.
- Surcharges can be added at the point of sale.
- COA is the cost of accepting a card payment, calculated for each card type: American Express, Mastercard, Visa, Alipay, Union Pay, Diners Club, and EFTPOS.
- COA includes merchant fees, bank interchange fees, card scheme fees, terminal rental fees, and may include other costs like fraud prevention, payment gateway fees, and insurance, provided they are supported by official documentation.
- Internal costs like wages and electricity cannot be included in the COA.
- GPN Solution offers a reporting tool to calculate COA for new merchants, with a review after 3 months to ensure the rate is reasonable.
- COA is calculated per Merchant ID (MID). For franchises or multiple stores under the same legal entity, you can average the surcharge rate across locations per card type. Individual MID COA cannot be averaged.
- Merchants may opt not to pass on COA fees to customers but must follow regulations if they choose to surcharge.
- Use our surcharge tool to calculate and adjust your rate monthly, especially useful for businesses with variable transactions.
- The Australian Competition and Consumer Commission (ACCC) may take action if surcharges exceed the COA. For more details, visit www.rba.gov.au.
- Merchants can impose a flat or fixed surcharge, ensuring it does not exceed the COA for any transaction.
- Debit transactions occur when using an EFTPOS key card or Scheme debit card with CHQ or SAV options.
- Credit transactions occur when selecting 'credit' on the terminal, typically with tap payments.
For more information
RBA Information
- RBA's Method for Calculating the Average Cost of Card Acceptance Across Various Merchant Pricing Plans
- RBA Standards for Applying Surcharges
ACCC Information
- ACCC’s Overview of RBA’s Average Cost of Card Acceptance Calculation for Different Merchants & Information of surcharges
- ACCC’s FAQ