How to Reduce Your EFTPOS Merchant Fees

Navigating the Cost of Payments in Australia

For many Australian small business owners, checking the monthly merchant statement is a source of frustration. With inflation and rising operational costs, merchant fees can represent a significant portion of your overhead. However, many businesses pay more than they need to for their payment solutions. By understanding the fee structures and making a few strategic changes, you may be able to lower what you pay.

1. Understanding the Fee Structure

Australian merchant fees typically consist of several components:

• Interchange Fees: Paid to the customer's bank.
• Scheme Fees: Paid to Mastercard, Visa, or Eftpos.
• Merchant Service Fee (MSF): The margin taken by your provider.

Often, businesses are on a 'Blended Rate' where they pay the same percentage regardless of the card type. While simple, this can be expensive if your customers primarily use Eftpos (debit) cards, which carry much lower costs than premium credit cards.

2. Leverage Least Cost Routing (LCR)

Least Cost Routing—also known as Merchant Choice Routing—is the single most effective way for Australian businesses to save money. When a customer taps a dual-network debit card (e.g., a card with both a Visa/Mastercard and an Eftpos logo), LCR allows the merchant to choose which network processes the transaction. Routing through the local Eftpos network is significantly cheaper than routing through international schemes. Routing eligible debit payments through the cheaper network can lower your cost of accepting cards. If your current provider doesn't offer LCR, it's time to switch.

3. Review Your Hardware Costs

Most providers charge a monthly rental fee for each EFTPOS terminal, and some add a setup fee too. Across several devices and several years, that adds up, so count every terminal fee when you compare providers, not just the transaction rate. Additionally, ensure your hardware is modern; older terminals may not support the latest fee-saving software updates.

4. Rethink Surcharging (Updated October 2026)

5. Transparent Reporting and Monthly Audits

Don't just set and forget. Review your statements monthly. Look for hidden fees like 'admin fees' or 'minimum monthly spend' penalties. If your business has grown, you may have more leverage to negotiate a lower rate with your provider.

Save More with KBServices

At KBServices, we believe Australian businesses shouldn't be penalized for getting paid. We can check whether LCR is switched on for your terminals, walk you through the fees on your statement, and make sure your POS systems are working for you, not against you. If you switch, our EFTPOS terminals come with $0 setup; the monthly terminal rental and your processing rate are spelled out in your quote before you decide.

Send us a recent merchant statement. Request a fee analysis or contact us and we'll show you what could change.