Worked costings and choosing a provider
Monthly card processing cost: a worked example for a small bakery
A line-by-line costing of one month of card payments for an illustrative Australian bakery under flat-rate, blended and cost-plus pricing, with the arithmetic shown.
To work out what card payments cost your business each month, split your takings by card type, apply each rate in your quote, add fixed cents per payment and every fixed monthly fee, then divide by takings to get your all-in effective rate. In the illustrative example below, a bakery taking $30,000 a month by card would pay about $510 a month on a 1.5% flat rate, $333 on a blended plan with separate debit and credit rates, and about $271 on a cost-plus plan, with the same $60 of fixed fees in each. Over a year that is a difference of roughly $2,900 between the dearest and cheapest option. Your own result depends on your card mix, so use your statement figures in the calculators.
This guide is part of the best-fit selection guide. All rates are illustrative assumptions, not any provider's prices.
The business
| Item | Figure (illustrative) |
|---|---|
| Card takings per month | $30,000 |
| Card payments per month | 1,500 |
| Average sale | $30,000 ÷ 1,500 = $20 |
| Domestic debit and prepaid | 70% of value: $21,000 in 1,050 payments |
| Domestic consumer credit | 27% of value: $8,100 in 405 payments |
| Foreign-issued cards | 3% of value: $900 in 45 payments |
| Fixed monthly fees | $60 (two terminals and account fee) |
All payments are in person. Least-cost routing is assumed to be on for tapped debit.
Option 1: flat rate
Terms: 1.5% on all cards, no per-payment fee.
- Transaction fees: $30,000 × 1.5% = $450.00
- Fixed fees: $60.00
- Monthly total: $510.00, effective rate $510 ÷ $30,000 = 1.70%
- Yearly: $6,120
Option 2: blended rates for debit and credit
Terms: 0.7% on debit and prepaid; 1.4% on credit and foreign cards.
- Debit: $21,000 × 0.7% = $147.00
- Credit and foreign: ($8,100 + $900) × 1.4% = $9,000 × 1.4% = $126.00
- Fixed fees: $60.00
- Monthly total: $333.00, effective rate 1.11%
- Yearly: $3,996
Option 3: cost-plus
Terms: interchange and scheme fees passed through at cost, plus a margin of 0.2% and 2 cents per payment. Underlying costs assumed after the 1 October 2026 caps: debit interchange 5 cents per payment, consumer credit 0.3%, foreign cards 1.6% (not capped until 1 April 2027), scheme fees 0.1% of value.
| Line | Calculation | Amount |
|---|---|---|
| Debit interchange | 1,050 × $0.05 | $52.50 |
| Credit interchange | $8,100 × 0.3% | $24.30 |
| Foreign interchange | $900 × 1.6% | $14.40 |
| Scheme fees | $30,000 × 0.1% | $30.00 |
| Margin (percentage) | $30,000 × 0.2% | $60.00 |
| Margin (per payment) | 1,500 × $0.02 | $30.00 |
| Fixed fees | $60.00 | |
| Monthly total | $271.20 |
Effective rate $271.20 ÷ $30,000 = 0.90%. Yearly: $3,254.40.
Side by side
| Option | Monthly | Yearly | Effective rate |
|---|---|---|---|
| Flat rate 1.5% | $510.00 | $6,120.00 | 1.70% |
| Blended 0.7% / 1.4% | $333.00 | $3,996.00 | 1.11% |
| Cost-plus | $271.20 | $3,254.40 | 0.90% |
Moving from the flat rate to cost-plus would save about $238.80 a month, or $2,865.60 a year, on these assumptions. The gap is large because the bakery is debit-heavy with small sales: a flat rate charges 1.5% on a $20 debit payment (30 cents) whose underlying cost here is about 7 cents.
Sensitivity: what changes the answer
- More credit and foreign cards. If foreign cards were 15% of value, cost-plus would rise and the gap would narrow. From 1 April 2027 the foreign-card cap of 1.0% reduces that effect.
- Fewer, larger sales. Fixed cents per payment matter less. See card fees on small sales.
- Higher fixed fees. A subscription fee or minimum monthly charge can wipe out a low rate at low volume.
- Routing off. If tapped debit went to the international network at a higher cost, cost-plus would rise. See least-cost routing.
Quick range with the estimator
For a fast check before you have quotes, enter 30 (thousand dollars) in the monthly processing cost estimator with the flat-rate band of $10–$19 per $1,000 and $60 of fixed fees. It gives a range of 30 × $10 + $60 = $360 to 30 × $19 + $60 = $630. The flat-rate figure above ($510) sits inside that range. Then use the card fee calculator on each quote for an exact figure.
Frequently asked questions
Where do I find interchange for my own card mix?
On a cost-plus statement, interchange is listed by card category. On a flat-rate plan it is not shown; you can use the RBA caps as an upper bound for domestic cards and ask for a cost-plus quote to see the real figures.
Should I include GST?
Use the same basis for every quote. If fees include GST and you are registered, the GST is generally claimable as a credit. See GST on merchant fees.
How often should I redo this costing?
Every 12 months, after any big change in sales, and whenever your provider changes its rates. A redo after 1 October 2026 is worthwhile because interchange caps fell.
Sources
- Reserve Bank of Australia — interchange caps from 1 October 2026 and 1 April 2027
- Australian Small Business and Family Enterprise Ombudsman — reviewing payment costs
- business.gov.au — managing business costs and cash flow
