Worked costings and choosing a provider
How to choose a payment provider for a small business: a best-fit method
A step-by-step way to find the best-fit card payment provider for an Australian small business, using your own statements, card mix, equipment needs and contract terms instead of rankings.
The best payment provider for your business is the best fit for how your customers pay, not the one with the lowest headline rate. Start with three months of your own statements, work out your card mix, average sale and monthly volume, decide which equipment and software you need, then ask at least three providers of different types for a written quote priced on those numbers. Compare the all-in monthly cost (transaction fees plus every fixed fee), the contract term and exit fees, settlement timing and support. Since 1 October 2026, you cannot surcharge eftpos, Mastercard or Visa cards, so the fee you choose comes straight out of your margin.
This is the overview for this section; every worked costing is linked below. We do not rank providers. Rates in examples are illustrative.
Step 1: Gather your numbers
From your last three monthly statements, note:
| Item | Where to find it | Example (illustrative) |
|---|---|---|
| Card takings per month | Statement totals | $35,000 |
| Number of card payments | Statement or POS report | 1,000 |
| Average sale | Takings ÷ payments | $35 |
| Share of debit vs credit | Statement by card type | 70% debit, 25% credit |
| Foreign, commercial, premium card share | Statement by card type | 5% foreign |
| In person vs online | Statement by channel | 90% in person |
| Fixed monthly fees | Statement fee lines | $50 |
If your statements do not show this split, ask your provider for a transaction report. Under the RBA's new statement rules (in effect from 1 October 2026, with a transition to 31 March 2027), statements must include card type, channel and network from the first full statement period starting on or after 1 April 2027. See reading your merchant statement.
Step 2: Decide what you need
- Where you take payments: counter, table, mobile, market stalls, home visits, online, invoices, recurring billing.
- Equipment: countertop terminal, portable terminal, phone-based tap-to-pay, or integrated POS. See renting versus buying terminals.
- Integration: POS, accounting, booking or e-commerce software.
- Cash flow: how fast you need funds. See settlement times.
- Other payment types: American Express, UnionPay, wallets, buy now pay later, PayTo or bank transfer.
Step 3: Shortlist across provider types
| Provider type | Typical pricing | Typical fit | Things to check |
|---|---|---|---|
| Bank or direct acquirer | Blended or cost-plus, terminal rental | Established businesses wanting negotiated rates | Contract term, rental, application and minimum fees |
| Payment facilitator | Flat rate, terminals often bought | New, mobile or seasonal businesses | Fund holds, account closure terms, online rates |
| POS software with built-in payments | Flat or blended, bundled with software | Hospitality and retail using that POS | Whether payments can be unbundled, exit costs |
| Online gateway and acquirer | Gateway fee plus card rates | Online stores and subscriptions | Two sets of fees, fraud tools, card-not-present rates |
Include at least one provider of a different type from your current one.
Step 4: Get comparable quotes
Give each provider the same information from Step 1 and ask for a written quote showing every rate and fee. Use the quote comparison checklist and the guide to comparing merchant quotes.
Step 5: Price each quote on your own numbers
Calculate the all-in monthly cost of each quote with the card fee calculator. Illustrative comparison for the business in Step 1:
| Quote | Terms (illustrative) | Monthly cost |
|---|---|---|
| A: flat rate | 1.3%, no monthly fee, terminal bought | $35,000 × 1.3% = $455 |
| B: blended | 1.0% + $40 rental + $10 account fee | $350 + $50 = $400 |
| C: cost-plus | Average cost 0.45% + margin 0.25% + 3 cents, $30 rental | $157.50 + $87.50 + $30 + $30 = $305 |
Then add one-off costs, such as terminals and any exit fee from your current provider, and test payback with the terminal and switching payback calculator. See switching payback.
Step 6: Check the non-price terms
- Minimum term, automatic renewal, notice and early termination fees. See merchant agreements and exit fees.
- When and how rates can change, and how interchange cuts are passed on.
- Settlement timing, reserves and fund holds.
- Chargeback process and fees. See chargebacks.
- PCI DSS obligations. See PCI DSS for small business.
- Complaints process and AFCA membership.
Step 7: Decide and review
Choose the quote with the lowest all-in cost that meets your needs, unless a non-price term (a long contract, slow settlement, poor integration) outweighs the saving. Diarise a review every 12 months, and after any big change in your sales mix.
The worked costings in this section
- Monthly processing cost worked example
- Card fees on small sales and fixed cents per transaction
- Repricing after the surcharge ban
- EFTPOS terminals: rent or buy?
- Online payment gateway fees
- How to compare merchant quotes
- When switching provider pays back
Frequently asked questions
Should I always choose the cheapest quote?
Not always. A slightly dearer plan can be the better fit if it avoids a long contract, settles faster or works with your POS. But compare on the all-in cost first so you know what the other benefits cost you.
Is it worth using my business bank?
It can be convenient, especially for settlement into the same account, but it is still worth getting a competing quote. Linking payments and banking can make switching harder later.
How many quotes do I need?
Three is a practical minimum, from at least two different provider types.
Sources
- Reserve Bank of Australia — payment costs and the October 2026 changes
- Australian Small Business and Family Enterprise Ombudsman — tools and guidance for small business
- business.gov.au — choosing payment methods
- Australian Financial Complaints Authority — check whether a provider is a member
