Merchant Card Payment Costs and Surcharging – Consultation Paper –
July 2025 Transparency of Merchant Fees

The lack of consistent publicly available information on merchants’ card payment fees charged by acquirers makes it more difficult for merchants to compare pricing across providers and for providers to assess their competitors’ offerings. Pricing plans can be complex and many competitive offerings are negotiated confidentially at levels below advertised rates. Hence, it can be difficult for merchants to know whether the prices they are receiving are comparable to similar merchants with their provider or other providers. Greater transparency of acquirers’ pricing could therefore support competition between acquirers, including by empowering merchants to seek a better deal with their current provider or to switch to another acquirer. This should put downward pressure on merchants’ payment costs and result in lower costs for consumers.

Views from submissions were mixed on whether acquirers should be required to publish information on their average fees, wholesale costs, transactions and margins. PSPs (including acquirers) and card networks generally opposed this proposal on the grounds that it could result in:

• the publication of information that they consider to be commercially sensitive
• reduced product differentiation if acquirers’ business or pricing models converge in order to have a favourable published fee (e.g. by removing additional bundled services)
• a deterrent effect on new entrants or innovations in the market that cannot yet compete on cost
• a disadvantage for acquirers servicing smaller merchants that have higher fixed costs.

Others supported proposals to promote transparency and competition among acquirers, including requiring acquirers to publish key breakdowns of their fees in a standardised format. There was less support for publishing acquirers’ market shares via their transaction volumes and values. Some submissions raised doubts as to whether additional information would be used by merchants and noted that transparency for complex types of plans would be difficult to implement and may create more confusion for merchants.

Views were mixed on whether more information on merchant statements would be helpful given the potential drawbacks of adding complexity to these statements. Many submissions emphasised that merchants do not select their payments providers purely on cost. Respondents indicated that many merchants value the simplicity and certainty of simple (single-rate) plans. Some acquirers also argued that simple plans allowed merchants to better compare pricing across providers.

A few submissions also commented on the cognitive, operational and time constraints associated with switching providers. Newer acquirers generally felt that the acquiring market was quite competitive with high rates of switching.

Nevertheless, some submissions argued that more information could be presented on merchant statements to help merchants better understand and manage their card payments costs. Some argued that merchants should be provided with a breakdown of the wholesale costs and acquirer margins charged by their provider. Others suggested that acquirers, including those offering simple plans, should be required to provide a breakdown of debit and credit card fees (including wholesale fees and acquirer margins) on merchant statements. There was also some support for simple and standardised information provided to merchants via a summary box on their statements or an online comparison tool (as in the United Kingdom).

6.1 Policy options

The PSB considered various options to improve the transparency of merchants’ card payment fees both at the acquirer level and merchant level to promote competition among acquirers and help merchants search for and switch to better deals.¹

Option 1: Status quo

Acquirers would not be required to publish any of their fees or provide further information on merchant statements beyond current requirements. Merchants would continue to observe acquirers’ advertised rates but would need to approach acquirers individually for bespoke quotes. Merchants would continue to receive information about their card payment costs directly through the statements provided by their acquirer or payment facilitator.

Option 2: Require acquirers to publish their average cost of acceptance by merchant size and card type

The RBA would set a standard that requires acquirers that process more than $10 billion in card payments annually (equivalent to approximately 1 per cent market share) to publish their average cost of acceptance rates across card types and merchant size categories on a quarterly basis.² While the PSB would encourage all acquirers and other PSPs to publish these data, the acquirer size threshold would provide new entrants or small acquirers with the ability to opt out if they find these reporting requirements unduly burdensome. Acquirers would also be required to provide the RBA with a copy of the data so that the RBA could republish the information on its website. Acquirers that meet the proposed threshold would be required to publish their average cost of acceptance (as a per cent of transaction values) on:

• all debit, prepaid and credit card transactions
• domestic debit and prepaid card transactions
• domestic credit card transactions
• international debit and prepaid card transactions
• international credit card transactions.

Those acquirers would be required to publish these rates separately for:

• small merchants that process $1 million or less in card payments annually
• medium-sized merchants that process between $1–10 million in card payments annually
• all merchants.

The proposed format of these publication requirements can be found in Appendix D: Draft Standards (see Schedule 1 in Standard No. 3). Relevant acquirers would be required to publish these in an accessible and prominent part of their websites.

Option 3: More consistent reporting of fees by acquirers on merchant statements

The RBA would amend its current standard on merchant cost of acceptance reporting to also include a further breakdown for the cost of accepting international cards (which tend to be the most expensive cards to accept), such that the cost of accepting domestic and international cards would be separately identifiable. This would be in addition to the current requirements to report merchants’ cost of acceptance by card network on merchant statements (see Appendix D: Draft Standards).³ Acquirers that process transactions on behalf of merchants indirectly via a payment facilitator would continue to be able to meet their obligations via their payment facilitator(s). As part of this option, the RBA would remove the exemption on taxi fares from reporting requirements on merchant statements.⁴

Option 4: Create an online quotation or comparison tool for merchants to compare pricing across acquirers

The RBA would require acquirers to provide their pricing information to a centralised comparison website so that merchants could gather quotes and compare pricing across acquirers in one location by entering their merchant characteristics (e.g. average transaction size, turnover, card transaction mix and industry). The comparison website would then produce indicative quotes based on all plans offered by participating acquirers as well as outline the services included in the quote. Merchants could then use this information to decide whether to switch to another provider or plan. This information would need to be updated whenever acquirers changed their pricing or service offerings.

An alternative approach would be for the RBA to set a standard that requires acquirers to provide an online quotation tool on their own website similar to the policy recently introduced by the Payments System Regulator in the United Kingdom.⁵ Through this tool, acquirers would be required to provide tailored pricing that accounts for merchant characteristics such as the size and composition of their cards transactions and their industry. Acquirers would be responsible for keeping their online quotation tool updated.

Other options raised in submissions

Some submissions suggested that fee reporting on merchant statements should be broken down into interchange fees, scheme fees and an acquirer margin. A few submissions suggested that merchants should be provided with estimated (or potential) savings from LCR enablement to incentivise take-up of LCR. However, the feasibility of implementing these options is unclear given the challenges acquirers face in determining merchant-specific scheme fees (see Chapter 7: Least-cost Routing).

6.2 Considerations

The PSB considers that transparency measures, if properly designed, can help promote competition and improve the efficiency of the payments system. Providing merchants with more information can encourage them to switch to a better deal and incentivise acquirers to compete via lowering prices. Greater transparency would also provide visibility on whether acquirers are passing on savings from reductions in wholesale fees (such as the proposed changes to interchange caps and benchmarks) to merchants.

The PSB considers that requiring acquirers to publish their merchants’ average costs of acceptance by merchant size and card type (Option 2) would:

• make it easier for merchants to compare their cost of acceptance to those paid by other merchants of similar size. This would be particularly useful for small merchants given the large dispersion in the level of fees for those merchants. Merchants could use this information to negotiate a better deal with their acquirer or switch to a different provider.
• make it easier for merchants to compare pricing across acquirers, since the media and industry groups would be able to use the data to publish league tables of the fees charged by acquirers.
• balance simplicity and usefulness for merchants. Merchant size and card mix are key drivers of payment costs and are already reported on many merchant statements.
• put competitive pressure on acquirers to pass through reductions in wholesale fees (such as the proposed reductions in interchange rates) and lower their margins to retain or gain market share.

The PSB’s view is that competition in the acquiring market is sufficiently strong such that upward price coordination is unlikely under Option 2. This assessment reflects that:

• There are a substantial number of players and newer entrants have steadily gained market share over recent years, reducing concentration in the acquiring market.
• Acquirers and other PSPs offer sufficiently differentiated services as many products are targeted to merchants of a particular size or industry. Many submissions also highlighted that merchants value non-price features such as simplicity and additional services.
• Acquirers and other PSPs would not be able to view competitors’ pricing in detail as aggregated figures would cover a variety of pricing plans and merchants.

The PSB does not propose to require publication of acquirers’ market shares and margins after considering arguments made by some submissions, including that this information could be commercially sensitive and that publishing it may not be required to achieve the PSB’s objectives.

The arguments for and against requiring acquirers to publish information on their merchants’ costs of acceptance as proposed under Option 2 are summarised in Table 5.

The PSB’s view is that more consistent cost of acceptance reporting on merchant statements (Option 3) could help merchants obtain quotes from other providers at a relatively low implementation cost for acquirers (or payment facilitators). The RBA received and examined example merchant statements from several large acquirers and other PSPs and found there to be significant variation in the level of detail provided on those statements. Merchant statements for simple plans or from acquirers that tended to service small merchants often provide less information, while statements for ‘interchange plus’ plans or acquirers targeting larger merchants had significant amounts of detail. The PSB is aware of the complexity that already exists in some merchant statements and seeks to balance disclosure of more information with stakeholder feedback arguing that providing significantly more information on merchant statements may not help merchants to shop around for a better deal.

The PSB’s view is that further transparency should be provided on merchant statements to highlight the much higher costs of accepting international transactions relative to domestic transactions. In addition to being able to view cost of acceptance by card network,⁶ adding an additional layer to report domestic and international transactions could help merchants compare the pricing they receive with the average prices considered in Option 2. This measure could be implemented at relatively low cost and help merchants renegotiate their card payment fees with their existing provider or obtain quotes from other providers.

Further transparency measures at the merchant level by providing an online comparison tool (Option 4) could help merchants receive quotes that are more tailored to their circumstances and potentially prompt them to review their payment plan periodically. However, the PSB assesses that this option would have limited benefits because:

• Providing accurate and useful information to merchants can be challenging. A limitation of this option is that many payment plans are negotiated on a bespoke basis based on merchants’ detailed transaction history. In the absence of transaction data sharing arrangements between acquirers and other PSPs for providing merchant-specific quotes, Option 4 may not provide more accurate pricing information than Option 2.⁷ A comparison tool is unlikely to be accurate without the ability to provide tailored quotes based on the merchant’s characteristics and transaction history:
  • Any potential quotation tool may not provide accurate information for specific merchants because pricing can differ based on merchants’ turnover, transaction mix, average transaction size, industry and risk profile. The merchant’s detailed transaction data is usually only known to the merchant’s current provider and is not always provided in merchants’ regular statements.
  • While creating a comparison tool may ease merchants’ search costs in comparing offerings, these quotes are unlikely to be personalised to merchants’ specific circumstances in the absence of a data sharing arrangement such as the Consumer Data Right. This is unlike the energy market, for example, where consumers’ historical energy usage can be accessed via the Consumer Data Right to provide more accurate quotes and comparisons across providers.
  • Pricing may be negotiated as a whole-of-customer relationship with other services included, particularly for large merchants.
• There would be significant challenges in designing a tool that would effectively increase rates of merchant switching or negotiating a better deal with their current providers. The PSB’s view is that, compared with other markets examined, the complexity and heterogeneity of payments plans is a barrier to implementing an effective comparison tool or transparency initiative on merchant statements.⁸ Each provider typically offers multiple types of plans (interchange plus, blended, simple and other types of plans) and not every plan may allow merchants to accept payments from the same card networks. The services included in the pricing may also differ, as may the terminal chosen by the merchant and any additional software or bundled services.
• Switching costs may limit the effectiveness of transparency measures. These switching costs include:
  • The cognitive burden involved in comparing providers through research, obtaining quotes and negotiating fees. More complex pricing structures may also increase the complexity of the research, negotiation or decision process.
  • The potential loss of bundled deals or non-payments services provided by the merchant’s current provider.
  • The potential retraining of the merchant’s staff, and the cost of setting up new systems or software and/or purchasing new hardware.
• Conversely, increased transparency may equip merchants with better information to renegotiate pricing with their current provider, resulting in lower prices with minimal switching costs.

6.3 Preliminary assessment

The PSB’s preliminary view is that, while competition in the acquiring market is strong, more can be done to improve the transparency of pricing for merchants. Transparency of pricing would become more important as a tool for placing downward pressure on card payment costs for merchants if their ability to surcharge were to be removed. The spread of costs for small merchants is quite wide, including for merchants of similar characteristics with the same acquirer. The PSB assesses that the lack of transparent information around the actual prices paid by merchants is hindering the ability of merchants to find out the typical price charged to a similar merchant and take steps to switch to a better deal if they are paying more. In the absence of increased transparency, there is also a risk that acquirers could take advantage of this opacity and merchant inertia to not pass through savings from the PSB’s proposed reductions to interchange caps.

The PSB’s preliminary assessment is that requiring acquirers to publish average costs of acceptance by merchant size and by card type (Option 2) would increase competition and efficiency. The PSB considers that this would be a low-cost way to increase transparency in the card acquiring market and allow merchants to gauge whether the prices they are paying are comparable with other merchants. The PSB’s preferred approach is to require acquirers to publish average cost of acceptance by merchant size for each card type to allow for comparisons across the PSB’s proposed scheme and interchange fee transparency initiatives. The PSB’s assessment is that this measure is detailed enough to allow merchants to make simple comparisons across acquirers and could further increase price competition in the acquiring market as providers compete to retain or attract prospective merchants.

Of the options that target transparency at the merchant-level, the PSB’s preliminary view is that improvements to acquirers’ cost of acceptance reporting on merchant statements (Option 3) would help merchants search for a better deal, particularly for merchants that have access to minimal information on their statements.

The RBA has reviewed example merchant statements from major acquirers and observed that some statements appeared not to meet the minimum requirements currently specified in the RBA’s standards. In the PSB’s view, acquirers should, at a minimum, provide cost of acceptance and transaction values split by card network (in line with existing requirements), with a further breakdown of these costs by domestic and international transactions (see Appendix D: Draft Standards). This would help merchants in obtaining personalised quotes from acquirers and other PSPs and conduct simple comparisons with published pricing on acquirers’ websites, with the aim to promote competition in acquirer pricing. Acquirers are currently required to provide merchants with information on their cost of acceptance by card network, aggregate costs and transaction values, so this should require little change for acquirers that are already compliant with the current requirements.

While online comparison tools (Option 4) could help merchants better compare pricing plans across acquirers, the PSB’s preliminary view is that this option is likely to be costly to implement and would yield uncertain benefits. For such large-scale initiatives to be effective, further work surveying merchants on their needs, designing and testing experimental solutions and implementing the final product would be required, likely at significant cost to the RBA and the industry. Based on a review of similar transparency initiatives, it is unclear whether these policies would yield significant incremental benefits in terms of increased rates of merchants switching or renegotiating with their acquirer beyond the other policies proposed in this Review. This would be particularly the case if the accuracy of the information cannot be guaranteed and merchant-specific transaction information cannot be used to generate accurate quotes. Even providing accurate quotes would not guarantee that merchants would act on the information and switch providers. Large-scale initiatives such as Option 4 could be revisited in the future as the market changes and responds to the policy proposals implemented in these set of reforms, and as more time passes to assess the effectiveness of the online quotation tool in the United Kingdom.

Endnotes

The RBA has powers under the PSRA to regulate acquirers, but there is uncertainty as to whether this power extends to the regulation of payment facilitators or other types of PSPs. 1

Where an acquirer is also a payment facilitator, the acquirer will be obliged to publish data for merchants that have a direct relationship with the payment facilitator. 2

Although the cost of acceptance reporting was initially intended to aid merchants in setting surcharges, the PSB intends to retain this reporting requirement to promote price transparency for merchants regardless of the policy decision on surcharging. 3

Because taxi fare surcharging is regulated by state regulations, taxi fares are currently exempt from the RBA’s Standard No. 3 of 2016 that prohibits the card networks from imposing no-surcharge rules and requires acquirers to provide information to merchants on their cost of acceptance in their merchant statements for the purposes of calculating permitted surcharges. Even if surcharging were to be removed, the PSB sees a policy case to retain requirements to report cost of acceptance on merchant statements to increase transparency and competition in the card acquiring market. There is not a clear policy case for retaining exemptions on taxi fares as the purpose of the Standard has changed from allowing surcharging to promoting transparency. 4

See PSR (2024a) for further detail on the Payment System Regulator’s initiatives in the United Kingdom. 5

This would include breakdowns by eftpos debit and prepaid, Mastercard credit, Mastercard debit and prepaid, Visa credit, Visa debit and prepaid, and any other card networks acquired by the PSP. 6

The RBA recommended in its 2021 Review of Retail Payments Regulation that merchant acquiring be included in the Consumer Data Right to facilitate such transaction data sharing (RBA 2021). 7

In forming this assessment, the PSB examined transparency measures that were designed to help individuals to switch to lower-cost providers in other markets such as the energy market and international money transfers. For more information, see ACCC (2023); ACCC (2024). 8