Insights

Accepting payments across the globe can be challenging, due to different payment methods, rates, network rules and regulations. Australia is no different. As your business looks to expand into Australia, or if you are managing payments for your Australian division of your company, there are five (5) key best practices to consider: 1. Interchange fees are regulated… Visa/MC publish interchange tables on their website outlining specific rate categories. Most rates are based on entry method (e.g. contactless, chip, keyed, recurring), card type (e.g. premium, super premium, business) and industry (e.g. government, education, grocery). There are also special incentive rates like Strategic Merchant interchange, which can be achieved for many of the larger retailers/grocers processing in Australia. 2. Scheme fees are not published… While interchange fees are published, scheme fees are not. The card brands and acquirers keep these tight to their vests. We have seen scheme fees vary by acquirer, so you’ll want to validate scheme fees you are charged are in line with market rates. You can also reach out to us to help you validate your fees. 3. Merchant choice is possible… Like the US, there is the option of least cost debit routing for both retail and online channels through the local debit network called EFTPOS. The sophistication of these capabilities depends on your acquirer, gateway and POS. EFTPOS is significantly less expensive than Visa and MasterCard debit.  If you are not leveraging EFTPOS today, you are leaving significant money on the table. 4. Contactless is a must… Australia has the highest adoption of retail contactless payments in the world. Over 80% of card-present payments in Australia are contactless via card or mobile wallets. Note that some acquirers have not upgraded their infrastructure for least cost routing with contactless payments. Make sure you check out routing capabilities of your terminal and acquirer. 5. PayPal is very popular and also expensive compared to cards. We can help you benchmark and, if appropriate, renegotiate PayPal. We can also help you evaluate other popular alternative payments. So, if you have a retail and/or online presence in Australia, you will want to better understand these nuances to ensure you are able to optimize your costs in this unique market. Questions, comments or need assistance, contact joey@optimizedpmts.com