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High merchant fees usually trace back to a few drivers: a card mix heavy in premium or credit cards, small average ticket sizes that magnify fixed per-transaction costs, online or card-not-present channels that cost more, an opaque pricing model, and debit routing that isn’t set to least-cost. The fastest way to know is to calculate your cost of acceptance and compare it against indicative benchmarks. If it’s well above them, one or more of those drivers is likely at work.
Last updated: 30 June 2026
A few recurring factors push merchant fees up. Card mix is the big one: premium and credit cards carry higher interchange than basic debit, so a business that takes a lot of them pays more. Average ticket size matters too — fixed per-transaction costs hurt far more on a $4 coffee than a $400 invoice. Channel plays a part, with online and card-not-present payments typically costing more than in-person taps. And the pricing model itself can obscure all of this, averaging expensive cards into a rate you never question.
One quiet driver is debit routing. Around 85% of Australian debit cards are dual-network, meaning a transaction can run over either of two networks at different costs. Least-cost routing sends it down the cheaper one, and the RBA estimates this can cut debit acceptance cost by roughly 20%. If least-cost routing isn’t switched on, you may be paying more than you need to on a large share of your everyday transactions — worth checking with your provider.
Before assuming you’re overpaying, calculate your cost of acceptance — total card fees divided by total card turnover — and compare. Indicative benchmarks put in-person flat rates around 1.37% and online around 1.78%, with small-business effective costs commonly between roughly 1.1% and 2.5%. Sitting well above the relevant band suggests one of the drivers above is at play. These figures are indicative only and this is general information, not advice.
Source: RBA Review of Merchant Card Payment Costs and Surcharging — Conclusions Paper (March 2026).
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