Worked costings and choosing a provider
Card fees on small sales: how fixed cents per transaction change your real rate
Why a fee like 0.9% plus 10 cents costs more than a 1.5% flat rate on a $5 coffee, how to find your crossover sale amount, and what low-ticket businesses should ask for.
A fixed fee per transaction, even a few cents, can make small card payments expensive. Your effective rate on any sale is the percentage fee plus the fixed fee divided by the sale amount. On an illustrative plan of 0.9% plus 10 cents, a $100 sale costs 1.00%, but a $5 coffee costs 2.90% and a $3 item 4.23%. A 1.5% flat rate with no fixed fee is cheaper for every sale below about $16.67 on those terms. If your average sale is small (cafés, bakeries, newsagents, vending, parking, transport), compare quotes on your average sale, not on the headline percentage.
This guide is part of the best-fit selection guide. All rates are illustrative, not any provider's prices.
The formula
For any sale:
- Fee = sale × percentage + fixed fee
- Effective rate = percentage + (fixed fee ÷ sale)
Monthly fixed fees (terminal rental, account fees) work the same way spread over your payments: divide them by the number of payments to get a fixed cost per sale.
Effective rate by sale size
Illustrative comparison of two plans:
| Sale | Plan A: 0.9% + 10 cents | Effective rate A | Plan B: 1.5% flat | Effective rate B |
|---|---|---|---|---|
| $3 | 2.7 + 10 = 12.7 cents | 4.23% | 4.5 cents | 1.50% |
| $5 | 4.5 + 10 = 14.5 cents | 2.90% | 7.5 cents | 1.50% |
| $10 | 9 + 10 = 19 cents | 1.90% | 15 cents | 1.50% |
| $20 | 18 + 10 = 28 cents | 1.40% | 30 cents | 1.50% |
| $50 | 45 + 10 = 55 cents | 1.10% | 75 cents | 1.50% |
| $100 | 90 + 10 = $1.00 | 1.00% | $1.50 | 1.50% |
| $500 | $4.50 + 10 = $4.60 | 0.92% | $7.50 | 1.50% |
Finding your crossover
The crossover is the sale amount at which two plans cost the same. For a plan with a percentage p1 plus fixed fee f, against a flat percentage p2:
- Crossover sale = f ÷ (p2 − p1)
- Here: $0.10 ÷ (1.5% − 0.9%) = $0.10 ÷ 0.006 = $16.67
Below $16.67 the flat rate is cheaper; above it Plan A is cheaper. Because businesses have a spread of sale sizes, use your actual distribution if your POS can export it, or at least your average sale.
Worked example: a coffee cart
Illustrative: a coffee cart takes 3,000 card payments a month with an average of $5.50, so card takings of $16,500.
| Plan | Calculation | Monthly fees | Effective rate |
|---|---|---|---|
| A: 0.9% + 10 cents | $16,500 × 0.9% + 3,000 × $0.10 = $148.50 + $300.00 | $448.50 | 2.72% |
| B: 1.5% flat | $16,500 × 1.5% | $247.50 | 1.50% |
Plan A looks cheaper on its headline percentage but costs $201 a month more, about $2,412 a year. The fixed 10 cents is twice as large as the percentage part of the fee.
Now a furniture store with 60 card payments a month averaging $900 ($54,000 of takings):
| Plan | Calculation | Monthly fees |
|---|---|---|
| A | $54,000 × 0.9% + 60 × $0.10 = $486 + $6 | $492 |
| B | $54,000 × 1.5% | $810 |
Plan A saves $318 a month. The same two plans suit opposite businesses.
Why underlying costs also have fixed parts
- Debit interchange is capped at 8 cents (or 0.16%) from 1 October 2026 and is often set as cents per payment, which is a large share of a $4 sale but tiny on $400.
- eftpos has often been priced per payment, while the international networks price more by percentage, which is why least-cost routing uses a dollar threshold.
- Scheme fees include per-transaction components.
This means a provider charging a flat percentage on very small payments may be making little or even losing money on them, and may set minimums or different rates for low-value payments. Read the fee schedule.
What low-ticket businesses can ask for
- A quote with no fixed fee per payment, or a lower percentage for payments under a set amount.
- Least-cost routing switched on, with a threshold that suits your sales.
- No monthly minimum, or one you will always exceed.
- Pricing on your actual average sale, not a generic example.
- Any micro-payment or low-value pricing the provider offers for your industry.
Run each option through the card fee calculator by setting the takings, count and fixed fee from your own month.
Do not forget minimum spends and surcharges
Since 1 October 2026 you cannot add a card surcharge on eftpos, Mastercard or Visa cards. Some small businesses consider a minimum card spend instead. The RBA's FAQs do not address minimum spends; whether one is allowed depends on your merchant agreement and the network rules, so check with your provider before introducing one. See surcharges removed from 1 October 2026.
Frequently asked questions
What is a good average sale to use?
Your card takings for a month divided by the number of card payments. If your sales are very uneven (many small and a few large), test two or three typical amounts as well.
Does the fixed fee apply to refunds?
It depends on the provider. Some charge a fee on refunds and do not return the original fee. Check the fee schedule.
Is a flat rate always better for small sales?
Only if it has no fixed fee per payment and no monthly minimum you would fall short of. Compare the whole fee schedule.
Sources
- Reserve Bank of Australia — debit interchange cap from 1 October 2026 and FAQs on surcharging
- Australian Small Business and Family Enterprise Ombudsman — reviewing payment costs
- business.gov.au — pricing and costs for small businesses
