My previous post received several enquiries about the surcharge ban on cards, particularly from lotto agencies. For lotto and other agency work, the ban is more significant than for most shops because retailers cannot simply raise the shelf price; the price of the goods is set by the operator. Officially the reduced interchange fee was supposed to pay for much of the cost, but as the recent ATO ban shows, this is not true. This is a different issue, which I will discuss in detail later, as we have been asked to join a group against it. This guide will cover what the ban actually says, why I think some proposed solutions are dubious, and the lawful ways to bring your payment costs down.

This article is general information, not legal advice.

• The ban started on 1 October 2026 and applies to eftpos, Visa and Mastercard credit, debit and prepaid cards. American Express and UnionPay are not formally part of the RBA regulation but have also removed surcharging from the same date (PayPal from 5 October).
• The change stems from the RBA’s final Conclusions Paper (March 2026), which removed the rule that stopped card schemes from banning surcharges. The ban is enforced under your agency and card contracts.
• A banned fee applies whenever a customer pays by card and the charge is linked to that choice of payment method. Calling it an “admin fee”, “service fee”, “platform fee” or anything else does not change the nature of the charge.
• Adding anything to goods, such as an official lottery ticket price, may also breach your lottery agency agreement. This fee is separate from the card scheme rules.
• The lower interchange caps should reduce your card fees, but only if your provider actually passes the saving on.
• Always obtain written confirmation from your merchant provider and your agency operator (e.g., Lotto) before changing any counter policy.

What the ban actually does

The RBA decided that card payment costs should be built into prices rather than added at the checkout. If a customer buys a $5 scratchie with a Visa debit card, you can no longer add 30 cents simply because they tapped a card.

The key test is whether the fee is charged because the customer chose to pay by card. Fees that have nothing to do with the payment method. A public-holiday surcharge that applies to every customer remains permitted.

Why do lotto retailers feel the impact of these fees more than other retailers?

Agency operators such as Lotto set the prices for tickets and your commission. A retailer can raise the price of a birthday card by 20 cents; a retailer cannot change the face value of a $10 Lotto ticket.

Illustrative example (use your commission rate and merchant fees):

• A $10 lottery sale at a 6% commission earns you 60 cents.
• A 1.5% card fee on that sale costs 15 cents.
• That single fee takes 25% of your commission before anything else.

Can you charge a flat fee instead?

Some retailers are tempted to add a “platform fee” on every transaction at the Lotto counter rather than a card-only surcharge.

The immediate commercial problem is that you become pricier than the Lotto app or other retailers. I doubt your customers appreciate that.

A new fee that appears only at the register also carries high risk:

• Card rules – If the fee applies only to card payments, it is a surcharge in disguise. It must apply to all payment methods. I had a discussion here with a bank. If you only have one payment method, then a fee is probably not permitted. 
• Consumer law – Pricing must be clear. You cannot alter the official Lotto catalogue price so that an extra fee here suddenly appears when the customer is ready to pay.
• Lottery agreements – Many agency agreements prohibit charging more than the official price. Check yours carefully; most do. I have a client who has a dry cleaning agency and has been told that they are not increasing the price for his bank's higher transaction fees now. 

A sign saying “2% card fee” or “40 cents on all transactions” does not fix any of these problems even if it is called a platform fee.

What can go wrong?

The lottery operator would almost certainly treat an unauthorised markup on a ticket as a material breach of your agency agreement. A single customer complaint can trigger a compliance review and put your agency or terminal at risk.

Your payment provider can review, suspend, or terminate your facility. Once the practice comes to their attention, it is common for them to take action. I have seen a case where a newsagent was fortunate that the matter did not proceed to court. 

How to cut card costs lawfully

1. Check that your fees have actually dropped.

The RBA’s changes lower interchange fees, but these fees are only part of what you pay. The rest is your provider’s margin, and that is where small retailers often lose out. Please query the fees in writing if you have any questions.

2. Switch on least-cost routeing (LCR).

Make sure least-cost routeing is activated. It will not help with credit cards, but it can meaningfully lower debit costs with no change in customer experience.

3. Consider a minimum card spend.

Some retailers set a minimum card spend (e.g., “Cards accepted for purchases over $10” or “Cash only under $15”). This approach does not recover the fee on every sale, but it can help. Before you introduce it:

• Consider customers who may not carry cash, such as people with disabilities, younger customers, etc.
• Apply it consistently.

I think the best solution is to use a friendly sign.

4. A friendly sign

Here are three workable options:

Direct & empathetic (I prefer)

“We are a small business and are struggling with the growing bank fees. Cash is greatly appreciated.”

Why it works: Radical transparency. Customers generally dislike hidden corporate fees, but they sympathise with honest local shopkeepers. Framing cash as appreciation rather than a penalty encourages a voluntary shift without friction.

Hard margin shield

“We are a small business. We are struggling with growing bank fees. Cash is appreciated.”

Combines the psychological appeal for cash with a clear operational boundary.

Community-focused appeal (for many this is probably the best solution)

“As a local small business, rising bank fees impact us heavily. Cash is greatly appreciated to help keep our doors open. Thank you for your support!”

Frames cash as support for the local economy and reminds customers that their payment choice affects whether their favourite local agent can stay in business.

By now most customers understand the pressure on small retailers, so a well-worded sign usually generates fewer complaints.

4. PayID

I have discussed PayID in detail here, please read it if you want my thoughts on using it in your shop.

A personal note of caution: I recently disputed a PayID payment with a tradesman after an unsatisfactory job. He accepted the dispute promptly and returned to fix the work. If I were an owner of a Lotto agency, I would be wary of arguments with customers who have lost money on tickets purchased in my shop.

5. Use your POS system to see where the money goes.

A good POS system will show payment-method mix and average sale size. You may find that debit sales cost far less than credit, or that most of your card costs come from a handful of low-value transactions.

Payment method comparison 

Costs vary by provider and plan. Treat the table as a prompt for questions, not a rate card.

Your checklist

1. Turn off any card surcharge in your terminal and POS settings.
2. Check that nothing at the counter, on signs, or on receipts adds a card-only fee under a different name.
3. Ask your provider, in writing, how the interchange cuts are being passed on.
4. Confirm that least-cost routeing is active.
5. Review your current statement.
6. Compare your rates
7. If you want a card minimum or cash-preferred sign, it is better to obtain written confirmation from your provider and your lottery operator first.
8. Never add anything to an official lottery ticket price without written approval from the operator.

The bottom line

The surcharge ban closes one door, but lower interchange caps and greater transparency open another. Retailers are encouraged to review their statements now.

Be wary of workaround fees being suggested at present. Disguised fees put both your lottery agency and your merchant facility at risk.

Want a second opinion on your fees?

We offer a free merchant-fee review (powered by our AI tools) for retailers. It examines your current terminal costs, checks whether least-cost routeing is enabled, and provides a written comparison of available merchant facilities. 

This article is general information only and is not legal or financial advice. Check your merchant agreement and lottery agency agreement, and speak to your provider, operator or industry body before changing any counter policies.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Many business owners have been asking me whether they can use cheap PayID to replace EFTPOS and reduce merchant costs while we scrutinise card fees. The problem is that, although most people can use it, "cheap" quickly becomes "slow, manual, and risky" for many.

For Australian retailers, payment choices depend on three main core KPIs: transaction cost, checkout speed, and risk. PayID affects all three. A good retail payment method must be fast, integrated, secure, and easy for the customer. Standard card and mobile-wallet payments do this perfectly. Manual PayID reduces the direct payment fee but shifts the operational cost onto your staff.

Let us explore some of the current pluses and concerns.

Key takeaways

• PayID is typically fast: settlement is usually under a minute.
• PayID is incredibly cheap: merchant fees are often zero.
• Manual PayID is slow: it adds steps for customers and increases staff workload.
• Fraud risk is higher: there are many more risks at the counter than with EFTPOS.
• Best for back-office: PayID now works best for invoices, deposits, and remote payments.
• Training is required: Using PayID safely requires training for both you and your staff.

What is PayID, and how does it work?

PayID is a bank-transfer system. It lets customers send money from their account to another account using an identifier like an email, phone number, or ABN. Settlement in Australia is generally done in under a minute. The customer enters your PayID in their bank app, and the money gets transferred into your account in seconds. Today, about half of Australians have used it in the past year.

I believe PayID works best when the customer and business do not need to complete the transaction together. A lay-by or an invoice prepared for a customer could serve as an example.

The first issue is that, although most people can use it, not everyone can. Usage depends on the banks and the specific account arrangements you both have. The next point is that even if they can use it, only 50 per cent do. I suspect that even among the 50 per cent who use it, many only use it for specific tasks. In short, "you and the customer having a bank account" and "both of you being ready to accept PayID at the counter" are not the same.

What factors contribute to the slower processing of PayID at the counter?

A card or mobile-wallet payment is now simple. The customer taps their card or phone on the terminal and gets approval in a few seconds.

A manual PayID payment requires much more effort. The customer must:

1. Take out and unlock their phone.
2. Open their banking app and select the payment function.
3. Locate or enter your business PayID.
4. Confirm the displayed business name.
5. Type in the exact amount.
6. Authenticate the payment with a fingerprint or code.
7. Wait for the merchant to verify the receipt.

If the customer has never used PayID, your staff may even have to explain how to locate the feature in their specific banking app. You are effectively turning your checkout staff into bank IT support.

Note: The retail landscape is evolving. Some payment providers now offer integrated PayID via dynamic QR codes at the counter. This allows customers to simply scan a code with their phone, which auto-fills the amount and business details, solving the manual entry issue. We are in discussions with a few providers about the integration, and I intend to discuss it more in a future post.

EFTPOS vs. Manual PayID at the Counter

To help you visualise the differences, here is a quick comparison of the two methods at a busy retail counter:

How does limited POS integration affect your store?

An integrated EFTPOS terminal talks directly to your point-of-sale (POS) system. The POS system does the verification; once it is satisfied, it marks the sale as paid, prints a receipt, and records the transaction automatically.

A manual PayID transfer does not do this. A manual PayID transfer creates several new tasks for your staff. They must match the payment notification in the business bank account, which means they need authorisation and access to your bank app to do so. They then have to manually enter the details of the sale into the POS system. Yes, you avoid a 1.5 per cent card fee, but you will pay for it in lost staff time.

Fraud risk

Never let your staff rely on a customer showing a screenshot of their banking app as proof of payment. For example, a fraudster might use a fake screen to convince you that a payment has been made, tricking you into releasing a $500 premium pet enclosure.

You certainly cannot accept a transaction that shows as "pending". The only reliable proof is confirmation through your own business banking system. Until you see the cleared funds in your account, the sale is unpaid. This brings up the problem mentioned above: only people with secure access to your business bank account can verify that the funds have actually arrived.

The hidden headache of PayID refunds

What I like about EFTPOS is that a refund can be processed with a single tap on the terminal. PayID refunds are entirely manual. You cannot simply reverse the refund. You need to make a new transaction, which takes time and increases the risk of human error, as it's all manual. Because it is two separate transactions, there is also a problem if the banks get involved. 

PayID payments can be delayed.

Here is what I see as a major issue with PayID: not all payments are truly "immediate". Many banks delay a first payment to a new payee for up to 24 hours. If something triggers their fraud system, the banks will hold the payment for extra security screening.

My wife, for instance, recently purchased a tablecloth from a French company. Because of international fraud flags, the bank's automated system stopped the payment until I called them to verify it was correct.

This creates an awkward moment at the counter. The customer believes they have paid, but the funds are not in your account. You only have two safe choices: the customer waits until the payment clears, or they must use another payment method. You have to ask yourself: is it better to frustrate a genuine customer with a wait, or put your business at risk by handing over goods for a payment that could be rejected?

How to set a safe PayID policy for your store

If you choose to accept PayID, please treat it as an extra channel, not an EFTPOS replacement.

A sensible policy includes:

• Never release goods just because a customer shows a PayID receipt or screenshot.
• Only release goods after the payment is confirmed in your own business bank account.
• Train your staff clearly on how to check the banking app, how to process manual refunds, and when to politely refuse to hand over goods until funds clear.

What's next for your shop?

I think PayID is an excellent bank-transfer system. If you are reviewing your payment mix—which is a wonderful idea right now—start by considering where PayID could reduce fees without slowing down your counter. I would add it to statements, invoices, and laybys.

Is your shop ready for in-store PayID?

If you decide to accept PayID in your shop, run through this quick checklist first:

• Bank Eligibility: We have confirmed our business bank account can receive PayID and NPP payments.
• Staff Access: We have set up secure procedures for staff to verify payments without sharing our main business banking passwords.
• Refund Process: We have a clear, documented process for handling manual PayID refunds.
• Queue Management: We have a plan for busy periods to prevent manual PayID users from holding up the line.

If you would like a second opinion on your payment strategy, we have a very powerful AI system specially designed for doing this for independent retailers. We also have a marvellous card payment plan.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Australia’s card-surcharging rules changed on 1 October 2026. Today we can no longer add surcharges to payments made through designated card networks, while lower domestic interchange caps also began applying.

The difficulty for retailers is that the full effect on merchant-service costs will not be clear immediately. The first industry data is due by 30 October 2026, pass-through information from large acquirers is due from 30 January 2027, and enhanced merchant statements will begin from 1 April 2027.

This staged release is frustrating for retailers who need to understand their costs now. In the meantime, the most practical approach is to establish a reliable baseline and review the available information as each official milestone arrives.

The POS Solutions AI chatbot schedule is designed to help retailers do that. It can organise the available information, compare payment costs over time and help identify questions to put to a payment provider. However, a retailer’s own contract, pricing plan, transaction volume and card mix will determine the final result. If you send us your quotes or contracts, we will run them through the AI.

Why is the information released in stages? 

The information is being released in stages because different parts of the changes depend on different reporting periods, and the change has set implementation dates.

The first reports provide industry and network data. Later reports are intended to show how changes in interchange fees flowed through to merchant-service fees. From April 2027, we should receive enhanced merchant statements that hopefully will make payment-cost information easier for retailers to identify and compare.

The first report, due by 30 October 2026, covers the quarter from 1 July to 30 September 2026. This period ended before the new rules began, so it provides a pre-change baseline rather than a direct measure of the effect on a retailer’s costs. The information will be useful for comparison, but it will not automatically determine what an individual retailer should be paying. A retailer’s result will still depend on its payment contract, pricing model, provider charges and card mix.

The review schedule

POS Solutions plans to release the available information approximately two weeks after each milestone. This allows time for relevant reports and provider information to become available and a distillation to be done and checked.

Review 1: October 2026

The first review establishes the retailer’s current position after the new rules began on 1 October 2026.

The review can examine whether the retailer’s statements contain enough detail to identify:

• Total card-acceptance costs.
• Domestic debit and credit transactions.
• Foreign-issued card transactions, where applicable.
• Fixed fees and percentage-based charges.
• Terminal, gateway, platform and account charges.
• The relationship between POS sales and settlement totals.

A reliable starting point is important because a retailer needs its own baseline before it can measure any changes.

Review 2: November 2026

The second review follows the first reporting deadline of 30 October 2026. The report covers the quarter from 1 July to 30 September 2026. Because this information is before the surcharge ban and related changes began, it only provides a pre-change reference point. We hope that this information will help our clients compare themselves to the broader market conditions, hopefully giving us a precise calculation of what an individual business should have saved.

Review 3: February 2027

Large acquirers must begin publishing information about how reductions in interchange fees flowed through to merchant-service fees. The big question is how the answer to the government will be framed. The justification for the changes.  We expect that it will be only partly true as we think that other fees like merchant-service costs may be increased or added, such as security fees, scheme fees, acquirer margins, fixed charges, terminal costs, gateway charges, etc.

In any case the published information will give retailers a stronger basis for asking their provider to explain changes in pricing.

Review 4: April 2027

From this date, foreign-issued card interchange caps and enhanced merchant-statement requirements should make international-card costs easier to identify and compare. Only then will enhanced statement requirements apply. It's unbelievable seven months later. 

How POS Solutions AI reviews payment costs is explained below.

If the information supplied to the retailer meets expectations, POS Solutions AI can compare:

• POS sales data.
• Payment reports.
• Merchant statements.
• Provider pricing information.
• Regulatory milestones.
• Card volumes and transaction values.

The system does not rely on one advertised rate. It compares total costs with the value and number of card transactions.

For example, a retailer may process $62,000 in card sales and pay $1,150 in total card-acceptance costs during a month. The effective cost is approximately 1.85 per cent.

If the previous month’s cost was $1,200 on $60,000 in card sales, the previous effective rate was 2.00 per cent.

This evidence would show that the effective rate has fallen. The review can then investigate why. Possible explanations may include:

• A change in the retailer’s card mix.
• More or fewer foreign-issued cards.
• A change in average transaction value.
• A new monthly or account charge.
• A change in the provider’s pricing.
• Differences between POS sales and settlement totals can also be useful.

As you can appreciate, although a lower effective rate is useful information, it does not by itself prove that the retailer’s pricing has improved.

What the reviews can identify

At each scheduled review, POS Solutions AI may help identify:

• Changes in total card-related costs.
• Changes in the effective payment rate.
• Unusual increases in provider charges.
• Differences between POS sales and settlement
• Changes in average transaction value and card volume.
• Missing or unclear card-category information.
• Possible differences between provider claims and the retailer’s own records.
• The date of the next scheduled update is also included.

Most importantly, the system can compare the retailer’s POS data with the payment provider’s reports and pricing information. If the figures do not match, the system can flag the difference for further investigation.

The chatbot helps to organise and analyse information. It does not replace the retailer’s payment provider, accountant or financial adviser, and it cannot determine the meaning of a contract where the underlying information is incomplete or unclear.

Questions to ask your provider

If the figures do not match, the AI can write a request for a written clarification from the payment provider.

Useful questions include:

• What changed in my pricing from 1 October 2026?
• Which part of my merchant-service fee reflects interchange?
• Did my blended rate change?
• Did any terminal, gateway, platform or account charges change?
• How do you classify domestic debit, domestic credit and foreign-issued cards?
• Are foreign-issued card transactions separately identified?
• Can I receive an enhanced merchant statement?
• Which statement period will first include the enhanced information?
• How have any reductions in interchange fees been reflected in my pricing?
• Are there any new minimum monthly charges or account fees?

Written answers are more useful than a general advertised rate because they give the retailer a record that can be compared with statements and POS data.

Conclusion

The payment reforms will not produce one universal cost for every retailer. Two businesses may process similar sales but have different results.

The POS Solutions AI schedule is intended to provide you a way to review the available information as it is released.

The information will continue to arrive in stages. A retailer’s own records therefore remain the most important starting point for understanding how the changes affect the business.

If you send us your quotes or contracts, we will run them through the AI.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Today a retailer often needs images, but many put it off. They see what others produce and they feel that their images are not as good, that they lack the skills to take professional photos or that it’s simply too time-consuming. That is not true today, as you can use AI to create high-quality images for your shop’s social media, advertising, online store, eBay listings, or even technical diagrams. See above for a before and after shot of a can of drink. Here is how to do it.

Key Takeaways

• AI tools can instantly and easily correct your images
• Your products and store displays can look like they were shot in a studio
• Basic smartphone skills are enough

What is AI-assisted image editing for retail?

You are using AI to fix lighting, remove messy backgrounds, and improve the image. The result is a clean, professional image ready to use. Better images matter because they increase engagement, clarify instructions, and improve product presentation. If a photo is poor quality, customers simply won't look at it.

It’s an immediate turn-off.

I once had a client who drew a rough, handwritten plan for the council. Because it looked messy, in an argument with another party, they stated that his poor presentation of his plan showed how bad the proposal was. If he had taken a photo of that hastily drawn layout and fed it to an AI tool, he could have asked it to turn his idea into a professional-looking visual. Ask yourself, how do you react to a poorly drawn diagram?

How can SMB retailers use images to promote on social media?

For many of my customers, social media is their primary form of advertising. It’s cost-effective, quick, and effective. However, to get people to look at them, you need decent photos.

Just look at the social media pages of major retail brands; you will see that their posts rely heavily on high-quality imagery. They know they only have a few seconds to grab a person's attention. With a good picture you have a chance that they will read your offer. Who is going to take up an offer if they first see a bad photo?

The images don't have to be spectacular. Many successful social media photographs are quite ordinary. You could simply show:

• A new jigsaw puzzle that has just arrived in your shop
• A newly released book
• A Christmas and Mother's Day promotion
• A unique gift item
• An intriguing new toy in your pet shop
• A floor display in your store
• A clearance sale

How to get started

1. Take the photos.

Start by using your smartphone. Because digital photos cost nothing, take at least five shots from different positions. I find placing the product on a white sheet of cardboard under good, natural light works best. The better your initial photo, the better the AI can improve it.

• Move closer (for detail)
• Move further back (for context)
• Take a photo from directly above
• Try the left side
• Try the right side

You will often find the best shot is your first choice, but it is always worth experimenting.

2. Edit with AI

Next, open your preferred AI tool. Most modern AI platforms have image processing capabilities. Now give the AI your photos and ask it to improve them as you want professional images to send to your customers. Ask for a few different attempts; it saves time.

If you don't like the result, tell the AI what you don't like and ask it to try again. Keep going until you get the look you want.

3. Check your details

Crucial step: You must check that labels, logos, prices, packaging, and visible text match the real product before using any AI-edited image. AI can sometimes "hallucinate" and alter text and branding. Your goal is for the image to show the real product.

Always do a final visual check.

Group shots

Getting the whole retail team together for a staff photo is notoriously difficult. Often you find, once you take it, someone has ruined the shot. They looked away, their eyes bulging, etc. Instead of doing reshoots, submit a few attempts to an AI image editor and ask it to fix the photos. AI can easily remove blinkers, fix stray hairs, or blend the best faces from multiple takes into one perfect group shot. It's a good idea to have everyone in the group have something unique so you can say the redhead girl looked away in the photo and use this photo to show her looking at the camera.

Diagrams and Layouts

If a hand-drawn sketch of a window display, custom order, or store layout looks messy, no one will take it seriously, including the customer. You can upload your rough sketch to an AI image tool and ask it to clean it up, turning a bad drawing into a professional, clear diagram or 3D-style visual. See a before and after shot.

Technical checklist

• Resolution: Aim for product images at a minimum of 2000×2000 px
• Format: Save as JPEG or WebP at about 90–95% quality. I prefer JPEG but most prefer WebP

Conclusion

"The examples above show how a quick smartphone photograph or a rough hand-drawn idea can be developed into a clearer, more professional image with the help of AI. The purpose isn't to replace the original idea, but to communicate it more effectively to your customers."

Please always double-check the finished image to ensure that product details, labels, and prices remain 100% accurate!

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Here is a step-by-step way to calculate what you really pay each month for EFTPOS and credit cards. It takes a few minutes and uses information you already have in your POS system.

For most small businesses turning over around $1 million a year, the total cost of accepting cards is typically between 1.1% and 2.5% of card sales. It depends on your average basket size, number of transactions, the plan you are on and how good a negotiator you are.

That might not sound like much, but on $40,000 to $60,000 in monthly card sales, a difference of 1% adds up to nearly $6,000 a year. Multiply that across a group and you quickly see why this is worth checking.

What You Will Need

1. Your merchant statement or rate sheet from your EFTPOS provider
2. From your POS system, run a 12-month totals report: total sales value and number of transactions for each payment type — eftpos, Visa/Mastercard debit, Visa/Mastercard credit, and American Express

The Simple Formula

For each card type, calculate:

Monthly cost = (Monthly sales × percentage rate) + (Monthly transactions × fixed fee per transaction)

To get the monthly figures from your 12-month POS report:

• Monthly sales = Total sales for that card type ÷ 12
• Monthly transactions = Number of sales for that card type ÷ 12

Then work out your most important number — your effective rate:

Effective rate = (Total monthly fees ÷ Total monthly card sales) × 100

This single percentage tells you the true cost and is what you should use to check your margins.

A Worked Example: A Newsagency or Pet Shop

Imagine an average month for a suburban newsagency with a bookshop and gift section. The rates below are examples only to show the maths. Yours will depend on your provider and whether least-cost routeing is enabled.

Total card sales for the month: $45,000

For this example we have assumed no fixed per-transaction fee to start.

Effective rate = $259 ÷ $45,000 × 100 = 0.58%

This is a best-case rate, usually only possible with least-cost routeing turned on and no terminal rental included. Most businesses will see a higher number on their actual statement.

Now add a 10-cent fixed fee on every transaction, which many plans include:

• Fixed fees: 1,610 × $0.10 = $161.00
• New total: $259 + $161 = $420.00
• New effective rate: $420 ÷ $45,000 × 100 = 0.93%

That extra 0.35% comes entirely from the cents-per-transaction charge. On top of this, you may also pay a terminal rental of $30 to $80 per month, which should be but is often not included in this percentage.

Now if you look through your statements, we will see other charges that you need to add to your costs.

Use these to calculate your actual percentage.

This actual percentage tells you, for example, if an item's retail price is $10, and your actual percentage is 0.95%. It costs you $10 x 0.95% for EFTPOS to sell it. 

Common Pricing Models

Providers quote costs differently. Knowing your model helps you use the formula:

1. Flat-rate or blended pricing: One percentage applies to all card types, for example, 1.1% on everything. It is simple to calculate, but you often overpay on cheaper EFTPOS and debit transactions.

2. Interchange-plus or scheme-plus pricing: You pay the actual interchange or scheme cost plus a fixed margin. This is usually cheaper at scale, but the statements can look more complex.

3. Tiered pricing: Different rates apply to "qualified", "mid-qualified" and "non-qualified" transactions. It is harder to forecast, which is why calculating your own effective rate is so important.

Whichever model you are on, your effective rate (total fees divided by total card sales) lets you compare like with like.

Putting Your Numbers to Work

Once you know your numbers, you can:

Check whether your rates are reasonable. For a sub-$1m turnover business, an effective rate of 1.1% to 2.5% is common depending on your provider and card mix.

Model changes. What if you negotiated 0.2% off your credit rate? What if you moved to a plan with a slightly higher percentage but no terminal rental? Plug the new rates into the same formula and compare.

A Quick Checklist for Your Next Statement

When your next merchant statement arrives, look for:

1. Your total card turnover for the month
2. The total fees charged
3. A breakdown by card type, if provided
4. Any fixed per-transaction fees or terminal rental charges
5. The effective rate, or calculate it yourself: (total fees ÷ total card sales) × 100
6. Add extras to calculate your actual rate.

That one number tells you more about what you are really paying.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

From 1 October 2026, changes to card surcharge rules make it harder for many retailers to pass merchant fees directly to customers.

Payment providers know retailers are reviewing their options right now, so many are offering deals with features that I think are smoke and mirrors, designed to hide the real cost. Before you sign, take a breath. Yes, a good-looking rate can save you real money, but a bad deal will hurt badly. Here are the six checks I'd run on any offer.

1. How Long Does the Contract Lock You In?

I've said this before: be very careful about signing a long-term contract now. Three-year merchant agreements are still the norm, so ask for a month-to-month agreement instead. If the provider insists on a longer commitment, ask what it will cost to leave, whether terminal rental continues after you stop using the terminal, and whether the provider can change its rates during the term. In my experience these long-term contracts are only long-term to you not the provider.

No one knows exactly how the market will settle after 1 October, and it will keep shifting. So you need flexibility more than ever.

2. Does the Quote Match Your Card Mix?

A provider can't tell you what its offer will really cost without knowing how your customers pay. As a working example, most of our retail clients process roughly 75% debit and 25% credit card transactions. Check your end-of-day POS reports and merchant statements for your own split.

Only once you have that figure should you ask the provider to price your debit and credit transactions specifically. A flat rate of 1.2% or 1.4% is easy to compare, but simplicity isn't the same as value. Always ask for the estimated total monthly fee in dollars, not just a headline rate.

3. What Does the Basket Size Cost on Your Actual Sales?

Your average basket size matters. For many of our retail clients it sits around $20 to $30, but a lot of smaller sales can change the result quickly. I have seen quotes based on $5 basket sizes. Clearly these are based on very old industry figures. 

The facts are a 12-cent fee on a $25 debit sale works out to 0.48%. The same 12-cent fee on a $4 drink or newspaper works out to 3%. Some provider pricing models are still based on older transaction patterns, with far more small transactions than retailers typically see today. Check your end-of-day POS reports and merchant statements for your real basket size, then ask the provider to run the quote against those actual figures.

4. When Will the Money Reach Your Account?

A low rate isn't much use if your takings arrive after you need them. This matters especially if you sell lotto and need enough cash available by settlement day. The penalties will cost you more then the savings. 

Ask the provider for its daily cut-off time and when funds from each day's sales will actually land in your bank account. Check Fridays, weekends and public holidays specifically. If faster settlement requires opening an account with a particular bank, factor that into your decision.

Don't accept "fast settlement" as an answer on its own. Ask for the schedule in writing, then compare it against the dates you need to pay lotto, suppliers and wages.

5. What Fees Sit Outside the Headline Rate?

If the offer uses interchange-plus pricing, ask the provider to show the interchange charges and any other fees separately. Don't assume interchange-plus will always beat a blended rate — always compare the final dollar amounts.

Also check least-cost routing (LCR). Ask whether it's available, whether it's switched on for your terminals, and how the provider decides which network to use for eligible debit taps. We recently reviewed a client's EFTPOS plan and found LCR had never been activated — they'd been paying more than they should. This isn't an isolated case: the RBA's own review found LCR is enabled for only around 84% of eligible in-person merchants, and switched on by just three of eleven large online payment providers, and that merchants with LCR enabled tend, on average, to have lower debit acceptance costs. Not all providers implement LCR the same way, so ask specifically how each one decides which network to route through, and get comparative numbers rather than taking "we support LCR" at face value.

Also watch for new fee structures. Some providers now split out security and interchange fees separately. Interchange fees may be coming down, but in some cases the added security fee eats up much of that saving — so check the combined total, not just the headline interchange figure. Terminal rental, security or PCI-related charges, setup costs and exit fees can all wipe out a saving on card rates.

6. What does the surcharge ban cover from your provider?

Officially, the ban only covers EFTPOS, Visa and Mastercard. However, many of the providers are including Amex, JCB and UnionPay. You need to ask do you need them. If so, how much will this unofficial ban cost you? This is important as you may be unnecessarily burnt.

What We Recommend

For now, we strongly recommend keeping your options open. Use your real POS figures, insist on clear settlement terms in writing, and avoid a long lock-in unless the complete offer makes a genuinely strong case for it.

Based on the offers we've reviewed, Swift Payments is one provider we're currently recommending clients consider, largely because of its month-to-month terms, If it does not work out you can change in 30 days. But don't take any recommendation, including ours, without testing the written quote against your own card mix, basket sizes and settlement needs.

If you have a new proposal and want to check what you're really paying, send your latest merchant statement or quote to our support team. We have written an AI to review EFTPOS rates and conditions. We can use that to break down your the charges, to compares them against your actual sales data and other EFTPOS rates, and gives you specific questions to put back to the provider.

If you'd rather run the review yourself, ask us for a copy of our AI so you can do it on your own computer. Either way: audit the offer before you sign it.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

When barcodes won't scan, your business suffers. Here are some of the problems it causes:

• Your checkout runs slow, because scanning is much faster than typing a code in by hand.
• You often cannot give customers detailed receipts.
• Your stock history becomes unreliable.
• Your stock quantities drift out of truth.
• Manual entry makes more mistakes.

It is better to scan more.

Start with your scan rate

Before you fix anything, get a feel for the size of the problem. This is easy to measure.

Go to sales and select Dissection Sales / Profitability for a Given Period, then run the report. I usually do it for the previous 12 months.

You will see a column marked %Scan. The higher, the better. In the example below, the green arrow marks a problem department.

Is it the scanner or the barcode?

There can be many causes, but there is a simple test: scan the same item on every scanner you own.

• If it fails on one scanner but scans on others, the problem is with that unit.
• If every scanner fails on the same items, the problem is the barcode itself — either the supplier's or one you printed yourself.

Fixing the scanner

If it is the scanner, try these before you replace it:

• Experiment with scanning height. The best distance varies with the barcodes you use and the type of reader, so take a few items and see what works.
• Move it away from bright light. Direct sunlight and glare confuse scanners.
• Clean the scanner and the printer. A dirty or scratched scan window is the most common cause of read failures. A rag and some cleaning fluid can do wonders.
• Check the age of the unit. Scanners are typically built to last about three years. If yours is older and misbehaving, replacing it is often cheaper than the staff time it wastes.

Fixing the barcode

If the barcodes are the problem, look at these common causes:

• Red barcodes. Many scanners use red lasers, which cannot read red bars at all. Black on white is the reliable combination. Gift and card lines are the usual offenders — if a supplier prints in red, ask for a replacement label or overprint your own.
• Missing quiet zones. Every barcode needs blank space on either side. Often, badly printed text, borders, or shrink-wrap seams printed around the barcode cause failures.
• Crooked or shiny labels. Scanners read barcodes perpendicular to the bars, so an angled label effectively shortens the bars and this can make the code harder to read. Keep the barcode flat and straight. Avoid sticking barcodes on shiny or curved surfaces, where light reflects back into the scanner.
• Your own printing. If you print your own labels, check the printer. Dirt on the printhead causes poor ink distribution, but a worn printhead, a fading ribbon, or cheap thermal paper produce low-contrast codes just as often. Clean first, replace the printhead if that fails.
• Damaged stock. Dirty, wet, or stapled-over barcodes will not scan. There is no fix for these except a new label.

Bonus tip: pick a spot and stick to it

Make a convention in your shop for where the barcode goes — front, top, back, whatever you choose. Apply it everywhere. Staff stop hunting for the code, and checkout speeds up.

One more thing: if you want the bigger picture on scan rates and what drives them including barcodes your suppliers never put on the goods at all.

Now there can be many causes of this problem. The first point is to test whether it is happening on a scanner. Sometimes you improve your barcode scanning rates from this scanner by:

-Experiment with your scanner what height it reads best with the barcodes that you use. It will vary depending on what barcodes you use and your barcode reader. Please take a few items, try and scan them and see what works best.
-Maybe the scanner is in bright light, so try moving the scanner to a different location.
-Try putting the barcode straight. Sometimes not having the barcode straight can cause problems for a scanner to read the barcode. It is also less of an eyesore.
-Avoid putting barcodes on shiny objects as the light will reflect into the scanner and cause problems.
-Cleaning your barcode scanner and printer can help immensely. A rag and some cleaning material can often do wonders.
-Remember, dirty or wet barcodes or barcodes with staples are not suitable for scanning.

Suppose all scanners see if the problem is the suppliers' or your barcodes. If it is your barcodes, check your printer; it may be dirt causing poor ink distribution.

Remember that sometimes you have to replace these units if the goods you sell are not suitable for what you sell or if they have deteriorated.

​A bonus tip

You can increase your scan rate if you make a convention in your shop where you will stick the barcode. The front, top, back, etc., stick with it if possible; this will save people from having to hunt for the barcode.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.