Worked costings and choosing a provider
How to compare merchant quotes like for like
Turn flat-rate, tiered and cost-plus quotes into one comparable monthly figure using your own transactions, spot the fees that quotes leave out, and negotiate with evidence.
To compare merchant quotes fairly, price every quote on the same month of your own transactions, split by card type, and add every fixed fee, so each quote becomes one all-in monthly figure. Headline rates are not comparable on their own: a 1.35% flat rate, a quote with separate debit and credit rates, and a cost-plus quote with a margin of 0.25% plus 4 cents can rank in any order depending on your card mix. In the illustrative example below, three quotes for the same business range from $276.50 to $432 a month. Then compare the non-price terms (contract length, exit fees, settlement, support) before you decide.
This guide is part of the best-fit selection guide. The quotes are illustrative, not real offers.
Step 1: Build your reference month
Choose a typical month (not your busiest or quietest) and split it:
| Card group | Payments | Value |
|---|---|---|
| Domestic debit and prepaid | 550 | $20,000 |
| Domestic consumer credit | 220 | $10,000 |
| Commercial, premium and foreign cards | 30 | $2,000 |
| Total | 800 | $32,000 |
Give this table to every provider and ask them to price it.
Step 2: Price each quote
Quote X: flat rate 1.35%, no monthly fee, terminal bought separately
- $32,000 × 1.35% = $432.00
Quote Y: separate rates by card group, $45 rental, $15 minimum monthly fee only if fees fall below $100
- Debit: $20,000 × 0.6% = $120.00
- Consumer credit: $10,000 × 1.2% = $120.00
- Commercial, premium and foreign: $2,000 × 2.0% = $40.00
- Rental: $45.00 (the minimum fee is not triggered)
- Total: $325.00
Quote Z: cost-plus, margin 0.25% + 4 cents, $25 rental, $20 account fee
Underlying costs (illustrative estimates, the provider should state its own):
- Debit interchange: 550 × $0.05 = $27.50
- Consumer credit interchange: $10,000 × 0.3% = $30.00
- Commercial and foreign interchange: $2,000 × 1.5% = $30.00
- Scheme fees: $32,000 × 0.1% = $32.00
- Margin: $32,000 × 0.25% + 800 × $0.04 = $80.00 + $32.00 = $112.00
- Fixed fees: $25 + $20 = $45.00
- Total: $276.50
| Quote | Monthly | Yearly | All-in rate |
|---|---|---|---|
| X: flat | $432.00 | $5,184 | 1.35% |
| Y: separate rates | $325.00 | $3,900 | 1.02% |
| Z: cost-plus | $276.50 | $3,318 | 0.86% |
On a cost-plus quote, ask the provider to price your reference month using its actual interchange and scheme fee schedules, not your estimates.
Step 3: Find what the quotes leave out
Quotes often show the main rate and leave other fees in a schedule. Ask for the full fee schedule and check:
- Online, keyed (manually entered) and recurring payment rates
- American Express and UnionPay acceptance and rates
- Minimum monthly fees and inactivity fees
- Chargeback and retrieval request fees
- PCI DSS programme or non-compliance fees
- Faster settlement fees
- Refund fees
- Terminal loss, damage, return and replacement fees
- Early termination fees and minimum terms
Use the quote comparison checklist to record the answers.
Step 4: Compare the terms that are not prices
| Term | Why it matters |
|---|---|
| Contract length and renewal | A long term with an exit fee can cancel out a lower rate |
| Rate change clauses | Whether the provider can change your rates with notice, and how much notice |
| Pass-through of cost changes | Whether interchange or scheme cuts reach you |
| Settlement timing | Same-day or next-day funds versus longer |
| Fund holds and reserves | When the provider can delay payouts |
| Support and swap times | What happens when a terminal fails on a Saturday |
| Integration | Whether it works with your POS and accounting software |
Red flags in a quote
- A rate described as "from" or "as low as" with no table of what applies to you.
- A low rate valid for a promotional period only.
- Pricing based on a generic business, not your transactions.
- Rental terminals under a separate equipment agreement with a long fixed term.
- A quote that still mentions surcharging to "recover your fees" on eftpos, Mastercard or Visa cards. That is not available from 1 October 2026.
- No information on how the 1 October 2026 interchange cuts are reflected.
Step 5: Negotiate with evidence
Show your current provider the lowest comparable quote, priced on the same reference month, and ask whether it will match the all-in cost or the structure. From 30 October 2026, large acquirers must publish average merchant fees for small and medium merchants each quarter, which gives you a public reference point. See merchant statements and transparency.
If switching is worthwhile, test payback with the switching payback calculator and read when switching provider pays back.
Frequently asked questions
Can I ask a provider to price my old statements?
Yes. Most providers will analyse your statements as part of a quote. Remove information you do not need to share, such as customer details.
Is the cheapest quote always the best fit?
No. A cheaper rate with a three-year contract and high exit fee, or slower settlement, may not be worth it. Decide what those terms are worth to you.
How long is a quote valid?
Ask. Rates can change, and some quotes are valid only for a set period.
Sources
- Reserve Bank of Australia — interchange caps and published merchant fee data
- Australian Competition and Consumer Commission — unfair contract terms in small business contracts
- Australian Small Business and Family Enterprise Ombudsman — small business guidance and dispute help
