Fee building blocks, pricing models and 2026 rules
Interchange, scheme fees and acquirer margin: how a card fee is built
A line-by-line explanation of the three costs inside an Australian merchant service fee, who receives each one, which are capped, and how to spot them on a statement.
Every card payment your business accepts triggers three costs. Interchange goes from your provider (the acquirer) to the customer's bank (the issuer) and is capped by the Reserve Bank of Australia for eftpos, Mastercard and Visa cards. Scheme fees go to the card network for using its system. The acquirer margin is what your bank or payment provider keeps for processing, settlement, terminals, fraud tools, support and profit. Together they make your merchant service fee. Interchange is the only layer with a regulated ceiling, and it fell on 1 October 2026; scheme fees and margin are set commercially, so they are where comparison and negotiation make the biggest difference.
This guide is part of the overview of merchant payment processing fees. Figures in the examples are illustrative.
Who is involved in one tap
A typical four-party card payment involves:
| Party | Role | What it charges or receives |
|---|---|---|
| Cardholder | Pays you | Usually nothing per payment |
| Issuer | The customer's bank that issued the card | Receives interchange |
| Card network (scheme) | eftpos, Mastercard or Visa run the rules and switching | Charges scheme fees to issuers and acquirers |
| Acquirer | The bank or licensed provider that processes your payments and settles funds to you | Pays interchange and scheme fees, charges you the merchant service fee |
| Payment facilitator (optional) | A provider that signs you up as a sub-merchant under its own acquiring arrangement | Charges you its own price, usually a flat rate |
Three-party networks, such as American Express in its direct model, act as both issuer and acquirer, so there is no separate interchange. The RBA's interchange standards do not cover them.
Interchange: the regulated layer
Interchange is set by each network in schedules with many categories (card type, channel, merchant type, contactless or not). The RBA does not set each rate but caps them. From 1 October 2026, under the varied RBA standards:
| Card category (domestic-issued) | Cap from 1 October 2026 | Previous cap |
|---|---|---|
| Debit and prepaid (including commercial debit) | 8 cents, or 0.16% if set as a percentage; 8-cent weighted-average benchmark kept | 10 cents or 0.2% |
| Consumer credit | 0.3%; benchmark removed | 0.8% (0.5% weighted-average benchmark) |
| Commercial credit | 0.8%; benchmark removed | 0.8% |
| Foreign-issued cards (all types) | 1.0% from 1 April 2027 | Not capped |
The caps are ceilings, not prices. Large merchants with "strategic" interchange categories often pay less than the cap; small merchants have tended to pay rates nearer to it. The RBA expects small merchants to benefit most from the lower caps because they had less access to strategic rates. See interchange caps and the foreign-card cap.
Scheme fees: the network layer
Scheme fees are charged by the networks to acquirers (and issuers). They include per-transaction fees, fees for cross-border payments, authorisation and clearing fees, and optional services such as tokenisation or fraud tools. They are not capped. In its March 2026 conclusions the RBA said it did not have enough evidence to pursue scheme fee price caps at this time, but expects networks to publish scheme fee roadmaps by 1 April 2027. These are to include six-month minimum notice of fee changes, classification of fees as mandatory, optional or behavioural, and machine-readable invoices.
Behavioural fees are worth knowing about because they can appear on cost-plus statements. They are charged when a payment does not follow a network rule, for example an authorisation that is not later completed, or a missing data field. Ask your provider which behavioural fees it passes through and how to avoid them.
Acquirer or provider margin: the competitive layer
The margin covers everything the provider does: processing, settlement, terminals or apps, fraud screening, chargeback handling, customer support, compliance and profit. It can be expressed as:
- a percentage on top of cost (cost-plus), for example 0.3%;
- fixed cents per transaction, for example 5 cents;
- a monthly fee (subscription models);
- or hidden inside a flat or blended rate.
A flat rate's margin varies by card. On a debit card with very low interchange the margin is large; on a foreign premium credit card it may be thin. That is why debit-heavy businesses often find flat rates expensive. See pricing models compared.
Worked example: one $60 sale
Illustrative rates for an in-person payment after 1 October 2026, on cost-plus pricing:
| Layer | Debit card (dual-network) | Consumer credit card |
|---|---|---|
| Interchange (illustrative, within cap) | 5 cents | 0.30% × $60 = 18 cents |
| Scheme fees (illustrative 0.08%) | 0.08% × $60 = 4.8 cents | 4.8 cents |
| Provider margin (illustrative 0.25% + 3 cents) | 15 + 3 = 18 cents | 18 cents |
| Total | 27.8 cents (0.46%) | 40.8 cents (0.68%) |
On a flat rate of 1.4% the same two sales would each cost $0.84. The flat rate is simpler, but for a debit-heavy business it can cost roughly three times the cost-plus figure in this example. For a business with many foreign and premium cards the gap is smaller and can reverse.
How to find the layers on your statement
- Look for a section showing transactions by card type (debit, credit, foreign, premium, commercial) and channel (in person, online).
- On cost-plus statements, find columns for interchange, scheme fees and margin or "service fee".
- On flat-rate statements, divide total fees by total card takings to get your effective rate.
- Add terminal rental, gateway and monthly fees to get the all-in rate.
- Compare with your provider's published fees and, from 30 October 2026, with the average fees that large acquirers must publish for small merchants.
New merchant statement requirements took effect on 1 October 2026 with a transition period until 31 March 2027. From the first full statement period starting on or after 1 April 2027, all acquirers must show card type, channel, network, value and number of transactions, and the merchant service fee in dollars and as a percentage. See merchant statements and transparency.
Frequently asked questions
Can I negotiate interchange?
Not directly. Interchange is set by the networks within RBA caps. Large merchants may qualify for strategic categories through their acquirer. Small businesses generally negotiate the margin and the pricing model instead.
Why did my fees not fall on 1 October 2026?
On cost-plus pricing, lower interchange should appear automatically. On flat or blended pricing it depends on whether your provider changed its rate. Ask in writing, and compare with a new quote. See least-cost routing for another lever.
What is a premium card?
A credit card with a higher interchange category, often a rewards card. With the consumer credit cap at 0.3%, the gap between standard and premium domestic consumer cards has narrowed, but commercial and foreign cards can still cost more.
Sources
- Reserve Bank of Australia — Conclusions Paper chapters on interchange fees, scheme fees and transparency (March 2026)
- Federal Register of Legislation — Payment Systems (Regulation) Act 1998 and the RBA standards
- Australian Small Business and Family Enterprise Ombudsman — small business payment cost guidance
