Glossary

Payments glossary

• Interchange

  Interchange is a fee set by the card networks, paid by the merchant's bank to the cardholder's bank on every card transaction.

• Scheme fees

  Scheme fees are charges paid to the card network itself — eftpos, Mastercard or Visa — for using its rails.

• Acquirer margin

  Acquirer margin is the amount a payment provider adds on top of its wholesale costs to arrive at the rate a merchant pays.

• Merchant service fee (MSF)

  The merchant service fee is the full charge a merchant pays to accept card payments, combining interchange, scheme fees and the provider's margin.

• Effective rate

  Your effective rate is your card acceptance costs divided by your card turnover for the same period.

• Least-cost routing (LCR)

  Least-cost routing sends a contactless debit tap through the cheaper of the two networks on the card — usually eftpos rather than Visa or Mastercard.

• Surcharge

  A surcharge is an extra amount added to a customer's bill for paying by card.

• Blended pricing

  Blended pricing charges one flat rate on every card transaction regardless of card type.

• Interchange-plus pricing

  Interchange-plus (or "cost-plus") pricing charges the actual wholesale cost of each transaction plus a disclosed provider margin.

• Card-present vs card-not-present

  A card-present transaction happens with the card or device physically at the terminal — a tap, insert or swipe.

• Settlement

  Settlement is when the money from card sales arrives in the merchant's bank account.

• Chargeback

  A chargeback is a transaction reversed by the cardholder's bank, usually after a customer dispute.

• eftpos vs debit

  eftpos is Australia's domestic debit network.

• Terminal rental

  Terminal rental is a fixed monthly fee for the card machine, typically $20–30 per month ex-GST where charged.

• Monthly minimum

  A monthly minimum is a floor on what a merchant pays: if percentage fees for the month come in under the minimum, the merchant is charged the minimum anyway.