Percentage and fixed fees
A provider may charge a percentage of the payment, a fixed amount, or both. On a 1.7% plus 25-cent plan, a $100 payment costs $1.95. The effective rate is therefore 1.95%, not 1.7%.
The fixed amount becomes less important as the invoice grows. For a business with many small payments, it can materially change the ranking between providers. Calculate using the number of transactions, not only monthly sales.
- ✓ Fee = sales × percentage + transactions × fixed charge
- ✓ Effective rate = total fees ÷ sales
- ✓ Annual cost = representative monthly cost × 12
Costs outside the headline rate
Hardware purchases, terminal rental, software subscriptions, premium invoice features, payroll, instant settlement and foreign exchange may sit outside the transaction rate. Refunds and chargebacks can also be treated differently.
List every compulsory cost for the workflow you intend to use. Optional features should only be included if the business genuinely needs them, otherwise a premium plan can look artificially expensive.
- ✓ Monthly plan
- ✓ Terminal or reader
- ✓ Refunds and disputes
- ✓ International cards and FX
- ✓ Instant transfers
Read the merchant statement
The statement shows what the business actually paid after card mix, negotiated rates and miscellaneous charges. Divide total merchant fees by processed card sales to calculate the effective rate, then compare that number with a new-provider quote using the same mix.
Do not assume every fee can be removed by switching. Some costs relate to the payment type or risk rather than the provider margin. Ask a prospective provider to explain every line that would change.
- ✓ Use at least three representative months
- ✓ Separate one-off hardware or setup
- ✓ Identify international and premium-card volume
- ✓ Request a written quote
Use the result commercially
Payment cost is part of the price of making sales. From 1 October 2026, the major card networks are introducing no-surcharge rules in Australia, so many businesses will need to reflect card costs in overall prices rather than a separate card fee.
Revisit margins, minimum job charges and package prices. The aim is not simply to choose the smallest percentage; it is to build a payment experience customers use while preserving the business's margin.
Provider fees, offers and product terms can change. Confirm the current Australian terms with the provider. This article is general information, not accounting, legal or financial advice.