Blended Rates vs Interchange-Plus: Which EFTPOS Fee Structure Suits Your Australian Venue?
The fee structure you choose can save your venue thousands per year. A plain-language guide to blended pricing vs interchange-plus, by venue type, with advice on least-cost routing and calculating your effective merchant rate.
Most Australian venue operators know their EFTPOS rate. Fewer understand why they are on the structure they are on, or whether a different structure would cost them less. The distinction between blended pricing and interchange-plus is one of the most consequential decisions in your EFTPOS arrangement, yet it rarely comes up in the original sales conversation.
This guide explains how the two structures work, which one suits which type of hospitality operation, and how to calculate the rate you are actually paying rather than the headline rate you were quoted. For a broader introduction to how EFTPOS fees are composed, see our guide to understanding EFTPOS fees in Australia.
About this guide
HEFTE provides educational content about EFTPOS in Australia. We earn a referral fee from some of the providers listed on this site if you choose to switch through our quiz, calculator or compare tools. This commercial relationship does not change the information presented in our guides, but you should know it exists. We recommend confirming any rate or feature directly with the provider before signing.
How merchant fees are made up
When a customer taps their card, the merchant does not receive the full transaction value. A percentage is deducted as a merchant fee. That fee is typically composed of:
| Component | Description |
|---|---|
| Interchange fee | Paid to the cardholder's bank |
| Scheme fee | Paid to Visa, Mastercard, or eftpos |
| Acquirer margin | Retained by your payment provider |
| Terminal and gateway fees | Hardware or software costs |
| Additional fees | PCI compliance, chargebacks, monthly charges |
The way these costs are presented to you depends entirely on the pricing model. With a blended structure, all components are combined into a single rate. With interchange-plus, they are separated.
What is blended pricing?
Blended pricing combines all the underlying costs into one fixed rate. The merchant sees a single percentage per transaction, regardless of which card the customer uses.
Examples
- · 1.10% flat rate on all cards
- · Or: 0.80% for debit cards, 1.20% for credit cards, 1.80% for Amex (still blended within each category)
With blended pricing, you do not see the interchange rate, the scheme fee, or the provider's margin. They are folded into the headline figure.
When blended pricing works well
- + The venue values simplicity over optimisation
- + Monthly costs need to be predictable for budgeting
- + Transaction volume is lower
- + Surcharging needs to remain straightforward
When blended pricing works against you
Venues with a favourable card mix (high domestic debit usage, low international or premium credit) can significantly overpay. The provider prices the blended rate to cover exposure to expensive card types, meaning you pay the same rate whether the transaction is a cheap eftpos debit or an expensive international credit card. At high volumes, this spread can represent thousands of dollars per year.
What is interchange-plus (IC+)?
Interchange-plus (also called cost-plus pricing) separates the merchant fee into its actual components. Each transaction is charged at the real interchange cost for that card type, plus a fixed margin and scheme fee.
Example breakdown
| Component | Rate |
|---|---|
| Interchange | 0.22% |
| Scheme fee | 0.08% |
| Acquirer margin | 0.18% |
| Total | 0.48% |
Because interchange rates vary by card type, your statement will show different rates for different transactions. A domestic eftpos debit and an international Mastercard credit are charged at very different underlying rates.
When interchange-plus works well
- + Transaction volume is high and small rate differences compound to significant savings
- + Strong mix of domestic debit (very low interchange)
- + Operators want full transparency on costs
- + After October 2026, interchange-plus customers should see the benefit of reduced credit card interchange caps reflected in their statements as the underlying interchange falls, subject to the terms of their merchant agreement
When interchange-plus adds complexity
- − Monthly costs harder to predict with variable card mixes
- − Surcharge compliance requires more care with variable rates
- − Interchange-plus statements can be more difficult to interpret than blended statements, which makes it harder for operators to compare margins across providers. Asking your provider for a clear margin disclosure is the simplest way to address this.
References to the October 2026 RBA reforms are based on materials published by the Reserve Bank of Australia. Operators should confirm the final form and commencement date directly with the RBA or their provider.
Ready to compare providers on pricing structure, LCR availability, and contract terms?
Compare EFTPOS ProvidersUnderstanding your card mix
Before deciding which structure suits your venue, you need to understand what cards your customers actually use. The same fee structure produces very different outcomes depending on the mix.
| Card type | Relative interchange cost |
|---|---|
| Australian eftpos debit | Very low (a few cents per transaction flat) |
| Visa and Mastercard debit | Low (around 0.10%–0.20%) |
| Standard consumer credit | Medium (up to 0.80% before October 2026 caps) |
| Rewards and premium credit | Higher |
| Corporate cards | High |
| International cards | Very high |
A venue where 70% of transactions are domestic debit has a very different optimal structure to a venue where 40% of transactions are international or premium credit. If you do not currently know your card mix, ask your provider for a debit vs credit breakdown. Reputable providers will supply this on request.
Least-cost routing: the setting most venues do not know about
Least-cost routing (LCR) is one of the most impactful settings in your EFTPOS arrangement, and one of the most frequently overlooked.
Many Australian debit cards support multiple payment networks. When a customer taps their Visa debit card, the transaction can route through either the Visa network or the eftpos network. These carry very different interchange costs: eftpos debit is substantially cheaper than Visa or Mastercard debit.
Without least-cost routing enabled, many transactions default to the Visa or Mastercard network, and you pay the higher rate unnecessarily. Least-cost routing automatically selects the cheapest available network for each transaction, typically routing debit transactions through eftpos rails.
Who benefits most from LCR
- · Cafés
- · Pubs and clubs
- · Takeaway venues
- · Bakeries and quick-service operations
- · Any business with high domestic debit usage and local customers
For these venues, LCR can represent thousands of dollars per year in reduced fees. It is worth confirming with your provider whether LCR is active on your account and whether it can be configured to force all eligible transactions through eftpos rails.
Which structure suits your venue type?
These are generalisations only. The right structure for any individual venue depends on factors specific to that venue, including card mix, volume, POS system, and contract position.
Cafés and quick-service hospitality
High transaction count, low average spend, mostly domestic customers, high debit card usage
Small cafés: Blended pricing is often appropriate for its simplicity. The lower administrative overhead and predictable billing suit lower-volume operations.
High-volume cafés: Interchange-plus frequently delivers significant savings. Domestic debit interchange in Australia is extremely low. Under a well-structured IC+ arrangement with LCR enabled, many cafés achieve effective rates between 0.45% and 0.75%, compared to 1.0%–1.3% on blended pricing. Indicative example: a venue at $50,000 per month in card turnover that moves from a 1.0% to 1.3% blended rate to a 0.45% to 0.75% effective rate under IC+ with LCR could save in the order of $3,000 per year. Actual savings depend on card mix, contract terms, and provider margin.
Restaurants
Mix of debit and credit, moderate transaction values, some premium cards
Structure typically suited to this venue type: Interchange-plus.
Restaurants generally have enough transaction value and card diversity to benefit from wholesale pricing visibility. The mix of card types means the effective rate under IC+ often sits comfortably below a comparable blended rate, particularly with LCR reducing the cost of domestic debit. For guidance on EFTPOS terminal options suited to table-service environments, see our guide to EFTPOS terminal types.
Hotels and tourism venues
Significant international card exposure, premium credit, corporate bookings
Structure typically suited to this venue type: Interchange-plus.
Blended providers price defensively when international and premium card exposure is high. They factor the higher interchange costs into the headline rate across all transactions, meaning domestic debit transactions effectively subsidise international card costs. Interchange-plus allows cheap domestic debit to remain cheap, while expensive international and premium cards are charged at their true cost. For venues with high international exposure, this produces better overall outcomes, particularly after October 2026 when credit card interchange caps reduce.
Pubs, clubs and gaming venues
Very high domestic eftpos debit usage, local customer base, large volumes
Structure typically suited to this venue type: Interchange-plus with least-cost routing essential.
These venues are often ideal candidates for wholesale-style pricing. They process enormous volumes of domestic debit, which under IC+ with LCR enabled is extremely cheap. The combination of LCR and interchange-plus pricing consistently produces the lowest effective rates for this category.
Multi-venue hospitality groups
Significant total processing volume, multiple locations, higher negotiating leverage
Structure typically suited to this venue type: Enterprise IC+ with custom pricing agreements and LCR optimisation across all sites.
Scale provides leverage in fee negotiations and makes the operational complexity of IC+ statements worthwhile. At group level, the visibility of interchange costs also supports more informed provider management and benchmarking.
Calculating your effective merchant rate
The most important metric when comparing pricing structures and providers is not the headline rate. It is your effective merchant rate.
Formula
Effective Rate = Total Merchant Fees / Total Card Turnover x 100
| Total fees | Card turnover | Effective rate |
|---|---|---|
| $4,500 | $500,000 | 0.90% |
This figure reveals your true cost of processing and is the only valid basis for comparing providers. A provider offering a "low" headline interchange-plus margin but charging significant gateway fees, PCI fees, or minimum monthly charges may produce a higher effective rate than a straightforward blended provider.
Use the HEFTE fee calculator to model your effective rate against different structures and providers at your actual transaction volume.
Common hidden costs to review
When comparing providers on either pricing structure, review the full cost picture:
| Fee | Notes |
|---|---|
| Terminal rental | Monthly hardware fees |
| Gateway fees | Online processing charges |
| PCI compliance fees | Security compliance charges, often $10–$30/month |
| Chargeback fees | Dispute handling costs |
| Settlement timing fees | Cost of faster access to funds |
| International card loadings | Often substantial; sometimes buried in blended rates |
| Amex fees | Sometimes excluded from blended rate coverage |
| Monthly minimums | Common in bank contracts; applies even in slow months |
Questions to ask your provider
On pricing structure
Is the pricing blended or interchange-plus? Can you provide a full fee schedule showing each component?
On least-cost routing
Is LCR enabled on my account? Is it automatic, or does it need to be activated? Can it be configured to always prefer eftpos rails for eligible transactions?
On your card mix
Can you provide a breakdown of my transactions by card type (debit vs credit, domestic vs international)? What percentage of my volume routes through eftpos vs Visa/Mastercard?
On contract terms
Is there a lock-in contract? What are the exit fees? Are terminals owned or rented, and what happens to the terminal if I switch providers?
On the October 2026 changes
How will the interchange cap reduction flow through to my rate? Will my pricing automatically adjust on 1 October 2026, or do I need to renegotiate?
Next steps
Calculate your current effective rate. Take your total fees from the last three months, divide by your card turnover, and multiply by 100. Compare that to the indicative rates in the venue type sections above. Use the HEFTE calculator to model different scenarios.
Take the HEFTE quiz to get a matched provider recommendation based on your venue type, POS system, and card volume. The quiz takes under two minutes. Start the quiz.
Compare providers across blended and interchange-plus structures, LCR availability, POS integrations, and contract terms. View the comparison.
About this guide
HEFTE provides educational content about EFTPOS in Australia. We earn a referral fee from some of the providers listed on this site if you choose to switch through our quiz, calculator or compare tools. This commercial relationship does not change the information presented in our guides, but you should know it exists. We recommend confirming any rate or feature directly with the provider before signing.
General information only
This guide is general information about EFTPOS arrangements in Australia. It does not take into account your specific business circumstances and is not financial, tax, legal or professional advice. Rates and product features change. We recommend confirming current rates and terms directly with the provider, and seeking professional advice tailored to your business before making a decision.
Rates and product features cited in this guide are accurate as at 13 May 2026. Rates change frequently; confirm current pricing directly with the provider before making a decision.
Rates last reviewed: 13 May 2026
Key terms
Blended rate
A fixed rate applied to all card transactions regardless of card type. Simple to budget but can mask the true cost at high volumes.
Interchange-plus (IC+)
A pricing structure where you pay the actual interchange cost for each card type, plus a fixed provider margin. More transparent; cheaper for debit-heavy businesses.
Interchange
The fee paid to the cardholder's bank on each transaction. Set by card networks and capped by the RBA. Varies significantly by card type.
Least-cost routing (LCR)
A terminal setting that automatically routes debit card transactions through the cheapest available network, typically eftpos rather than Visa or Mastercard.
Effective merchant rate
Your true cost of card acceptance. Calculated as: total fees divided by total card turnover, multiplied by 100.
Acquirer margin
The portion of your merchant fee retained by your payment provider. The component most affected by negotiation.
Run your own numbers
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