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 total charge a merchant pays to accept card payments, combining interchange, scheme fees and the provider's margin.
Effective rate
Your effective rate is your total 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.