How merchant payment fees are calculated
Merchant fees are rarely a single flat number. Most Australian providers combine several components into the rate you see on your statement:
- Percentage transaction fees — a percentage of each sale, often the biggest component of your cost.
- Fixed transaction fees — a flat cents-per- transaction charge added on top of the percentage rate.
- Gateway fees — a separate charge for online payment gateway or ecommerce checkout services.
- Terminal rental — a monthly cost for EFTPOS hardware, sometimes bundled and sometimes billed separately.
- International card fees — an additional percentage charged on cards issued outside Australia.
- Chargeback fees — a fee charged when a customer disputes a transaction, regardless of the outcome.
- Miscellaneous provider fees — statement, PCI compliance or account-keeping fees that vary by provider.
Understanding which of these apply to your account is the first step in reducing your total payment cost.
What does a 1% merchant fee cost?
The table below shows illustrative monthly card acceptance costs at different processing rates and monthly card sales volumes, calculated as monthly sales multiplied by the processing rate.
| Monthly card sales | 0.75% | 1.0% | 1.25% | 1.5% |
|---|---|---|---|---|
| $25,000 | $188 | $250 | $313 | $375 |
| $50,000 | $375 | $500 | $625 | $750 |
| $100,000 | $750 | $1,000 | $1,250 | $1,500 |
| $250,000 | $1,875 | $2,500 | $3,125 | $3,750 |
Figures are illustrative estimates based on the processing rate applied to monthly card sales, and do not include fixed transaction fees, gateway fees or other charges described above.
Want to understand the assumptions behind these figures? See how we calculate payment costs.
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